Adeia Inc. (ADEA) Q3 2026 Earnings Call Transcript

We're back, Jeff.

Fantastic. And you can see my screen?

I can see the earnings slide, title slide.

Perfect.

Everything else okay?

Yeah, yeah. We're all set now. Thanks.

All right. I'm going to roll around to each mic to do a pre-check. We'll get them to do another check.

Okay. Sounds good.

Mic check for Dipti.

Loud and clear. Thank you.

All right. Mic check for Keith. One, two, three, ABC.

Loud and clear. Thank you.

Sorry, I'm going to mute. Chris is here, but he walked out of the room. I'm going to mute for a bit, and then I'll get set up in the other room with the backup laptop and dial in line.

Okay, sounds good.

Hey, Jeff, can you hear me? I can, yeah.

Hello, Lisa, is that you?

Hello, it's me.

Fantastic. Let me just use conference operator. And we also have the audio team. Well, they're connected. They might have stepped away. I'm not 100% sure. Tim, you still there? Yeah, we're here. Okay. Great. We have Lisa on the line. She's a conference operator. Again, when you're ready to do soundchecks, let us know.

Okay. We're getting set up. So we're going to have, you'll see Jose is going to join today as the backup laptop and backup phone.

Okay.

And operator's name is Lisa?

That's right.

Okay, Lisa, you'll see Jose join. I'm going to drop off. This is Tim, by the way. I'll drop off when he's in, and he will be the backup for the Zoom session. So if there's something that happens, we'll come in here with that laptop and use that. If we have like a building failure, we will switch over to the actual dial-in phone line, which we'll join here shortly as well. Understood. And we'll let the people that let us in know that that's the RNC backup line.

Okay.

All right, thank you.

You're welcome. Okay, and we do have the backup speaker line connected to the audio only here.

All right, thank you.

You're welcome. Did you want to test that line at all, or did you want me to just keep it muted unless you need it?

Yeah, we usually, the operator keeps it muted unless we have an emergency, and then the operator will need to unmute us.

Okay, perfect.

Thank you.

You're welcome.

Hi, Lisa, this is Chris Cheney. Can you hear me okay?

Yes, you're coming through loud and clear.

Wonderful. I just wanted to go through with you real briefly the order of what's going to happen on the call, So you know when you step in with the Q&A. So what will happen is at quarter of the hour, Jeff will begin to play the file that we have already prepared, which is our remarks. It'll run for like 15 minutes of music. And then at the top of the hour, it'll go into the remarks, which is first a kind of introduction to the call, and then it gets handed over to me. And then I'm reading about three or four minutes. And this is all pre-recorded, but three or four minutes. And then I hand it over to our new CEO. Her name's Dipti. And then Dipti has about probably five to seven minutes of commentary. And then she hands it over to our CFO, Keith, and Keith has about another five or seven minutes of commentary. And then he ends his remarks, and he says something to the effect of, I now will turn it over to the operator for the Q&A period. And that's when you step in and say something to the effect of, you know, you give the polling instructions to the callers, and I have the dashboard in front of me here, and I can see who is in the queue, and sometimes I move them around, sometimes I don't, it just depends, but I'll take care of the order. And generally speaking, the question and answer period will have four people who I allow to ask questions, and we usually ask one or two questions each, and then after they are done, it would typically last maybe 10 to 15 minutes of Q&A, Okay. And then you will hand the call, and that will conclude our Q&A session, and then you will hand the call back over to Dipdiva Chani, who is our CEO, for some closing remarks. And then she will read a statement, a few sentences, so it'll take just maybe a minute or two. And then that'll be the end of the call, and you can close the call at that point.

Okay. And you said her name is pronounced Dipti Vachani?

Yes, Dipti Vachani. It's D-I-P-T-I, and her last name is V-A-C-H-A-N-I, Vachani.

Okay, perfect. And then you just cut out for me at the very beginning when you started, you did say that you would start playing the music 15 minutes prior?

Yeah, Jeff will begin the music at 15 before the hour, right?

Yeah, that's right. So we have the 50-minute lobby baked into the pre-recorded intro, and then clients, our ideas, prepared remarks. So I will give an announcement usually around one minute, two, that I'm going to play the entire recording with the baked-in music. So at that point, once you hear the music, everybody on mute, and you can put it into the main at that point, into the main line at that point. And then, as Chris had mentioned, usually around five minutes to the end, I'll give him, I'll message you in the chat saying it's getting close to the end, and then I'll give you like a one minute warning, just as a heads up. And then to Chris's point, yeah, and then to Chris's point at the very end, when you close out the call, I will mute everybody's line just to give a few minutes for the webcast to catch up. And then I'll drop another message in the chat to let you know that the webcast ended and all is clear.

Okay, perfect. Thank you, Jeff.

No problem. So, actually, sorry, with that said, can I play a little bit of the recording just to make sure everybody You can hear it.

Yeah, yeah, go ahead. Okay.

Thanks. Let me skip ahead to 15 minutes or so.

Here we go.

Great. You get to hear my voice. I hate hearing my voice.

Following the presentation, the call will be open for questions. I would now like to turn the call over to Chris Cheney, Vice President in Investor Relations for Audio. Chris, please go ahead.

Good afternoon, everyone. Thank you for joining us as we share with you details of our quarterly financial results. With me on the call today are Dipti Avichani, our CEO, and Keith Jones, our CFO.

Is that good, or do you want to play more?

Yeah, sounds good.

Loud and clear for me.

Yep, sounds great over here as well. Perfect. I'll bring it back to the beginning. All right, so it's 4.30 Eastern my time, so I'll circle back in about 14 minutes.

Yeah, so do we need to do soundtracks for Keith and Dipty as well before we go into the music?

Yeah, yeah. Of course, yeah. Thanks for the reminder. Yeah, just let me know when they're ready.

Okay. They're not in the room yet, but I'll go get them and get them settled in, and we'll do some. I mean, that'll only take a few minutes, so.

Yeah, sounds good.

All right, I'll go ahead and put my end back on mute, and I'll let you know when we're in the room.

Hey, Jeff, how do I sound on my computer? Do I sound loud and clear?

Yeah, you're clear. You just sound a little bit louder than, like, Chris.

Okay, yeah, I'm on my laptop. This is just as a backup.

Yeah, okay.

Jeff, you know, I'm going to test this out real quick. That way I kind of at least don't sound too loud. How does it sound now?

Yeah, that's better.

Okay.

Okay. Testing. One, two, three. I'm here. Okay.

You sound kind of quieter or maybe distant.

Am I not sitting right? Oh, there you go.

Yeah.

Is this better?

Yeah. Perfect.

Cool. Why am I reading? What am I reading? I don't have... Oh. Oh. Thank you, operator. Once again, I'm excited to be here and to dive deeper into our business and strategy in coming months. I want to thank the audio team for the warm welcome and their hard work in continuing to deliver results. I look forward to meeting many of you later this quarter as I attend the two upcoming conferences, the annual Roth Technology Conference in New York in November and the annual Wells Fargo TMT Summit in California in December. Thank you for joining us today.

So, Lisa, that is the part that Dipti will read live after the Q&A is over.

Okay, so she's reading that. Yes.

Chris and Jeff, yeah, she sounded fine.

Yeah, right.

Our best years are ahead of us. Testing, one, two, three. Testing.

Loud and clear, thank you. All right, thanks, everybody. I'll go ahead and put us back on mute. Sounds good.

And I'll circle back at about 444, sorry. Sounds good. Hey, I'll just give you the one-minute warning. So in about a minute, I'm going to start the recording with the big-to-music, and then Lisa, that'll be your cue to put everything into the main conference call. Thanks, all.

All right, thank you, Jeff. We're on mute.

Thanks, all.

Thank you.

Good day, everyone. Thank you for standing by. Hi. Welcome to Adia's third quarter 2026 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. I would now like to turn the call over to Chris Cheney, Vice President in Investor Relations for Adia. Chris, please go ahead.

Good afternoon, everyone. Thank you for joining us as we share with you details of our quarterly financial results. With me on the call today are Dipti Vachani, our CEO, and Keith Jones, our CFO. Dipti will share with you some general observations regarding the quarter, and then Keith will give further details on our financial results and guidance. We will then conclude with a question and answer period. In addition to today's earnings release, there is an earnings presentation which you can access along with the webcast in the IR portion of our website. Before turning the call over to Dipti, I would like to provide a few reminders. First, today's discussion contains forward-looking statements that are projections, predictions, or other statements about future events, which are based on management's current expectations and beliefs, and therefore subject to risks, uncertainties, and changes in circumstances. For more information on the risks and uncertainties that could cause our actual results to differ materially From what we discussed today, please refer to the risk factors section in our SEC filings, including our annual report on Form 10-K and our quarterly report on Form 10-Q. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. To enhance investors' understanding of our ongoing economic performance, we will discuss non-GAAP information during this call. We use non-GAAP financial measures internally to evaluate and manage our operations. We have therefore chosen to provide this information to enable you to perform comparisons of our operating results as we do internally. We have provided reconciliations of these non-GAAP measures to the most directly comparable GAAP measures in the earnings release, the earnings presentation, and on the investor relations section of our website. A recording of this conference call will be made available on the investor relations website at audia.com. Now, I would like to turn the call over to our CEO, Deputy Vachani.

Thank you, Chris, and good afternoon, everyone. I'm excited to be here and honored to lead Audia. I've worked at some of the most cutting-edge companies in the world, and I chose Audia for its technology, its team, and its timing. First, the technology. In media, AI is accelerating the shift to more personalized, on-demand experiences, and our innovations in discovery and personalization sit right at the center of this change. In semiconductors, our innovations in hybrid bonding and thermal management help solve some of the biggest bottlenecks in scaling AI compute and memory. Second, the team. Throughout my career, I've been tasked with solving some of the most difficult problems in AI scale. As I get to know Adia's prolific inventors, I've asked myself, where have you been my whole life? I could have really used your help. Our engineers are addressing the greatest challenges the AI industry is solving today and well into the future. I've spent time with members of the senior leadership team, and I'm very impressed by their experience, their talent, and the culture of innovation they've built. Third, the timing. AI is reinventing how we discover and consume media, and it is transforming the compute infrastructure Audea's IP sits right where those trends meet. Media is information. Semiconductors process information. In partnership with the ecosystem, our opportunity is to anticipate where the market is headed and invent the technologies it will need. Building upon my successful track record at ARM, Intel, Skyworks, and Texas Instruments, I am excited to share with you what I'll bring to Audia. I have a proven track record of building businesses around leading-edge technologies. I maximize value by creating programs to monetize the technology and building ecosystems that help scale it. At Arm, that meant bringing new, reoccurring revenue streams and bringing together hundreds of partners. I look forward to applying that experience here, along with a leadership style built on candor, accountability, and staying close to customers and technology. My near-term focus is clear. Listen, learn, and execute. I am spending time with our employees, customers, and shareholders, and working with our team to deliver the path towards our long-term annual revenue target of $600 million. I will continue to diversify our revenue streams and accelerate our innovation engines in both media and semiconductors. Keith will cover our third quarter results in more detail, but I will briefly cover a few highlights. Revenue was $80.2 million in the third quarter. As I have reviewed our pipeline and where our technology plays in the broader ecosystem, I am very excited and confident in the opportunities that lay ahead in the short-term and the long-term. However, our business is relatively sensitive to the ultimate timing of a small handful of deals. In an effort to be prudent and transparent, we have adjusted our revenue guidance to reflect the potential range to the extent that certain deals are executed beyond 2026. Even with this change in guidance, I am confident with the progress we're making. My goal remains to hit the high end of the range. Keith will provide additional color later in the section. I am proud of the work done in the third quarter. We signed eight deals across pay TV, consumer electronics, e-commerce, and social media. Our business remains robust, and the momentum we are seeing across our pipeline provides us with the confidence for the remainder of this year, Before I turn the call over to Keith, I want to thank the Board for the trust they have placed in me to be the next leader of ADIA. I also want to thank Paul for all that he has done for ADIA over the past four years and for working with me through this transition period. I couldn't be more excited to be here and for the future of ADIA.

Keith? Thanks, Dipti. Let me begin with a very warm welcome for Dipti as our new CEO. Speaking on behalf of all the employees here at Audia, we are extremely excited to have you on board, bringing your extensive experience, energy, and leadership. I am very much looking forward to our partnership for years to come. Now let me turn to a review of our third quarter results. Third quarter revenue was $80.2 million. Deal momentum was strong, with eight license agreements closing in the quarter across pay TV, e-commerce, consumer electronics, and social media. Four of these deals were with new customers. As we have mentioned before, adding new customers is critical to the continued diversification of our revenue streams. I would like to emphasize that pay TV is overall an important component of our business. The underlying revenue remains significant for us. As such, we continue to innovate in this area, and we are able to further leverage this technology in other growing areas, such as streaming and e-commerce. With that being said, I am proud to announce that we signed a significant multi-year renewal with Charter. Charter is the largest provider of paid TV and broadband services in the United States and has been a valued customer of ours for over 20 years. We also signed a multi-year renewal with TCL, one of the world's largest manufacturers of connected TVs. Please. This renewal highlights the importance of our consumer electronics business, which has consistently been greater than 10% of our total revenue. In e-commerce, we signed a new long-term license agreement with Fanatics, a leading sports apparel e-commerce company. This reflects the growing momentum we have had in the e-commerce space, leveraging the success of our RPX deal in the second quarter. Other notable agreements signed in the third quarter included new deals with a social media company and a consumer electronics company, as well as license agreements with three other pay TV providers. Since separation, we have aimed to support our revenue across our core pay TV market and to expand and grow revenue in both semiconductor and our adjacent media markets. We are proud of the progress we have made. With the tremendous number of opportunities that we see ahead of us, we recently increased our long-term annual revenue target to $600 million. With the widespread adoption of our technologies, our confidence is unwavering, and our long-term target remains unchanged. As part of this growth trajectory, increasing our recurring revenue is of paramount importance to the company's overall success. In the third quarter, we grew non-paid TV recurring revenue by 48% year-over-year, continuing a multi-quarter trend. We continue to be very excited about the expanding industry adoption of hybrid bonding across both the memory and logic markets. As noted in recent news, hybrid bonding will be essential to the manufacturing process at 20-plus layers in HBM in the next few years, as well as for future 3D RAM, 3D NAND, and high-bandwidth flash. For audio, this timing aligns nicely with our contract renewals with the top three memory manufacturers. We view the ultimate pervasive adoption of hybrid bonding across both the memory and logic markets as a key to driving a sustainable and growing revenue stream for many years to come. Our IP portfolios are the foundation of what we do and are the lifeblood of our business. We ended the quarter with over 14,500 patent assets for both semiconductors and media. This commitment to innovation has resulted in our combined portfolios growing 6% year-to-date. Our patent growth is focused on areas of strategic importance, including hybrid bonding, thermal management, and media technologies that support AI-driven experiences. Our creative and talented inventors are critical to our continued success. Approximately 80% of our patents have been developed internally by this proud group, and we are dedicated to finding solutions that address important industry challenges. Now I would like to discuss our operating expenses, for which I'll be referring to non-GAAP numbers only. During the third quarter, operating expenses were $43.8 million, an increase of $3.6 million, or 9% from the prior quarter. This anticipated increase was primarily driven by higher litigation expenses. Research and development expenses were up $176,000 compared to the prior quarter. Selling general and administrative expenses increased $1.6 million, or 8%, from the prior quarter, primarily due to portfolio maintenance costs and other expenses to support our strategic sales efforts. Litigation expense was $7.2 million, an increase of $1.8 million, or 35% compared to the prior quarter, primarily driven by higher spending related to our various legal matters. Interest expense during the third quarter was flat at $8.1 million. Our current effective interest rate, which includes amortization of debt issuance costs, was 7.2%. Other income was $1.8 million and was primarily related to interest earned on our cash investment portfolio, and due to interest income recognized on revenue agreements with long-term billing structures under ASC 606. Our adjusted EBITDA for the third quarter was $36.9 million, reflecting an adjusted EBITDA margin of 46%. The depreciation expense for the third quarter was $500,000. Our non-GAAP income tax rate was 21% for the quarter. Our income tax expense consists primarily of federal and state domestic taxes, as well as Korean withholding taxes. We ended the third quarter with $127.7 million in cash, cash equivalents, and marketable securities. And we generated $5.1 million in cash from operations. We made $6.1 million in principal payments on our debt in the third quarter and ended the quarter with a term loan balance of $386.5 million. We paid a cash dividend of $0.05 per share of common stock. Our board also approved a payment of another $0.05 per share dividend to pay it on December 14th to shareholders of record as of November 23rd. For 2026, we are reducing our revenue guidance to $375 to $415 million. As Dipti mentioned earlier, our pipeline remains strong and robust. However, this reflects the impact a small handful of deals we are actively working on. With the progress we have made to date, we are optimistic about closing these deals, which would place it at the high end of the range. However, these deals are relatively large and legally complex, which can take time to execute. Thus, to provide transparency, we have adjusted the range to reflect the potential impact to the extent certain of these deals are executed beyond 2026. We are lowering our operating expense outlook to $176 to $180 million. This reflects both discipline expense management within our R&D and SGA functions, as well as expected lower litigation spending as a result of certain court delays, which would defer the anticipated costs. We expect interest expense to be in the range of $32 to $34 million. We expect other income to be in the range of $6 to $7 million. We expect a resulting adjusted EBITDA margin of approximately 55%. We expect the non-GAAP tax rate to be 21% for the full year. We also expect capital expenditures to be approximately $2.5 million for the full year. Our entire team remains committed to executing on our goals for the remainder of this year. We remain confident in our technology, our team, and the strength of our growing pipeline. That brings an end to our prepared remarks, and with that, I'd like to turn the call over to the operator to begin our question and answer session. Operator?

Thank you, sir. And everyone, if you have a question today, please press star 1 on your The telephone keypad. Once again, that is Star, one if you have a question today. And your first question comes from Kevin Cassidy, Rosenblatt Securities.

Yes, thanks for taking my question. And congratulations, 50, and welcome. Just, you know, how should investors be estimating the time for signing new license agreements with semiconductor customers? Is this more complicated than the media customers, or maybe – and I guess I'm assuming that's where some of these handful of deals that might be delayed are coming from the semiconductor market.

So you're right. The semiconductor market is different than the media market in such that the media market is much more fragmented, the semiconductor market being a more concentrated group of customers within logic and memory. Though the handful of deals that we're referring to for this quarter were media deals, we expect semiconductor, especially in the logic side, to kick in sometime next year in 27, 28 timeframe, and then memory renewals 28, 29. And so we will expect that to be in a revenue forecast in that timeframe. But right now, the handful of deals that we're looking at are on the media side. And honestly, we see a slide. The pipeline hasn't changed. It is strong, and it's exactly the pipeline we looked at last quarter. But this is, as we get closer, it's about deal timing. And that's it. It's deal timing and being transparent on that timing. We've decided to adjust the range.

Okay, great. Thanks for that clarification. And just, you know, going again to the semiconductor side of it, of the ones you have in the pipeline, are they more data center products or is it across all end markets?

It's all end markets, so I'll categorize them into three. We have the logic market, and you've heard about our AMD business, as well as other customers that we know are engaged in hybrid monitoring, Vodcom, Intel, NVIDIA, Thamen, and so there is the logic group of customers. Then you have your memory customers. And so there's a group of customers there. Sandus and Kyokusha are on the NAND side, and then other memory providers on HBM. And then I think you'll see it more holistically across the board with data center companies acting more like semiconductor companies. And we know that. That's happening today. They're building their own silicon. And as they do, hybrid bonding will be of value to them. And so, we'll see them step in as well as customers for us.

Okay. Interesting. Thank you.

And your next question today will come from Scott Thurl, Roth Capital.

Hey, good afternoon. Thanks for taking the questions. Dipti, congratulations, and look forward to working with you. Hey, Keith, how are you doing? And hey, maybe just a quick clarification, just in terms of the mix of revenue in the quarter, Keith, I'm not sure if you could provide some color in terms of media semi-mix, recurring and catch-up, and want to clarify whether all of those deals that you guys were referring actually occurred in the quarter, because I think press releases for TCL and Spectrum came out after the quarter. So wondering if that made it into the third quarter results. And then as you're looking into the wide range of implied expectations in the fourth quarter, can you take us through what's at the lower end versus the higher end, the big gating swing factors, that $40 million range from the low end to the high end?

Hey, Scott, thanks for your question. So a few parts there. So we'll break them down one by one, my friend. So just kind of giving the numbers on media versus semiconductor. And just to be very transparent, I'm talking about just Q3 in and of itself. So media was $65 million. Semiconductor was $15 million. So we're seeing some growth quarter over quarter, year over year on semiconductor. So once again, a great story in that perspective. And then for recurring versus non-recurring, just using kind of some simple round numbers, the recurring revenue was $76 million, and then the non-recurring was about $4 million in that regard. So, I'm trying to make sure I remember all your questions because there was several multiple parts to that. The revenue growth that we're seeing is actually kind of aligned with what we anticipated. I think Dipti will get into a little bit more, but once again, where we're seeing our revenue opportunities, our pipeline is extremely strong. It's very strong. And at the end of the day, quite frankly, it's timing. And ultimately, where we're at, I could not be more pleased. If we look year over year, where we were at last year at the same time, we're actually ahead business-wise in terms of total revenue. And then even on operating margins, we're doing absolutely fantastic. And then our company, our team, we are entirely focused, as you heard in my prepared remarks, of hitting 415. 415 is the number that we're really focused on. 415 was the midpoint of the guidance that we previously had, and those opportunities still align. What we are a little bit want to be transparent about is, like we said, there's a small handful of deals that kind of move that quarter, and it's really execution of those deals to get us to the midpoint or the high point of that range or otherwise. So we're really focused, and to be blunt, it's a matter of when, not if. It's a thousand percent on timing, and we're locked in on that. So our best days are really to come. I think Dipti can add a little bit more color on that backdrop as well. Dipti?

Yeah, I mean, the beauty of this business is the business doesn't go away, right? The accounts don't go away. It is all about timing. And I see a path to 415, like Keith mentioned. We have a path to close it, and we are 110% focused on that. But I wanted to be, we wanted to be transparent that there is, because of timing, it could swing one way or the other, and we wanted to give you that range.

That's perfect. Very helpful. Thank you for the caller. And Dipti, if I could follow up in terms of semiconductor in 27 and 28, I know it's early, but if you could take us through some of your high-level thoughts in terms of how this progresses. It sounds like we see logic next year, and then if you could dive into a little bit more the adoption in HBM DRAM, there's been a lot of discussion and dialogue in the marketplace about layers and timing and available capacity in the industry, but it seems like it's lining up with when we start to move to 16 layers and 20 layers with your renewal timeline. So I'm wondering if you could extrapolate on that and maybe provide just a little bit more color in terms of the diversity within the logic pipeline. Thanks.

You're absolutely right. It is lining up very well with the timing of 16 layers and 20 layers, and we'll see it with HPM 4 and 5. You know, I think if you look at this more holistically, in the logic space, we're seeing that traction happening already with AMD. We know that Nvidia thing is going to be incorporating HBM. I mean, it's going to be incorporating hybrid body, right? And then the traction at Intel and Apple and Broadcom. So the logic space, we see it happening already. We know it's happening in the memory space. It's exactly the way you mentioned it with 20 layers and 16. And so across the board, 27, 28, 29, they're going to be great years for us in the semiconductor space. Think about also overlaying on top of that this idea of heterogeneous compute. When we look at the world of physical AI or edge computing, we're talking about lots of different kinds of processing coming together and chiplets. And chiplets are also a very big opportunity for hyperbinding. And so, again, I think there's multiple vectors here in play. 27, 28 on the logic side, 28, 29 on the memory side, and holistically a very, very strong business. And Keith, you wanted to add on the memory side as well? Sure.

And, you know, Scott, you're very perceptive. It's almost as if you walk our hallways and you see us jumping it up and down about every product announcement that we hear kind of coming out. So, you know, there has been a lot of conversation about when do you start seeing the impact of hybrid bonding in high-volume manufacturing. That very much is kind of lining up with HBM5. And, quite frankly, we're completely excited about that. You hit the nail on the head. By the time we start getting into high volume manufacturing, that aligns perfectly with our renewal cycles, with the top three semiconductor memory manufacturers. So that's really a great thing for audio. And that is something that we look forward to. And frankly, it's beyond a proof point of the adoption of our technology. It really talks about our resilience, our technology, and how it's kind of shaping things. Because once again, hybrid bonding, if you hear in the media, it's quite frankly, it's the only way to move forward. There is not another alternative to get to from a performance perspective. And that really makes us excited. So, you know, once again, it's a great opportunity. You picked up on it. We see that kind of, as Dipti talked about, playing out a really kind of latter half of 27, but more in a 28 and 29, which aligns perfectly from all the news releases in terms of when high-volume manufacturing kicks in.

Perfect. Thanks so much. I'll get back in the queue, and anytime you want to allow me to wander the halls, happy to do it. Thanks, guys.

You're welcome anytime, my friend. You know that.

And as a reminder, it's star one if you have a question. Next up is Hamid Corzand from BWS Company.

Hi. So first off, let's just talk about this, you know, revenue that you're reporting here in Q3. So last quarter, you were pretty much, you know, laser focused that your commentary that was going to be higher than Q2, but similar in levels. And then you would get a ramp in Q4. Now you're backtracking. You've missed Q3. And you're saying it's definitely going to be Q4. And how are you certain? Because it seemed like at the beginning of the year, you've got AMD, you got Microsoft, you had all these things going. And, you know, it seemed like everything was fine. But now you're missing and you're saying it's deals getting pushed out. Why are you so confident? Why should we believe you?

Well, I think you heard our remarks, Ahmed. And quite frankly, when I look at our pipeline and what we have in front of us, I'm incredibly excited, my friend. Just being honest with you. And you've been following us for years. And you also know that we are a small volume, large dollar shop. So with that being said, all of these deals are large and complex, and I'll repeat what I said before. It's a matter of if, not when. So the items that we kind of identify that are in that small handful of deals, they were in our pipeline at the beginning of the year. Frankly, when we take a look at our forecast and where they were going to be at, we proved out that we could make traction. We approved that. We believe that we can close with them. But we would have anticipated some of those deals closing out a little bit sooner. But then you start dealing with the art of complexity of negotiating with someone on the other side that have these large, complex deals, and in some cases, new logos as well, which adds a degree of complexity. That all affects timing, not value in dollars of what we're going to see over time. So our team, once again, we're focused on trying to get that 415. But you also know that we take great pride of being transparent with shareholders. That view of the world that we gave you 90 days ago was absolutely a fact, but things evolved, they changed, and our year-end target remains the same for the most part in what we're really trying to achieve in the company, but we just are trying to be transparent to the things that slept beyond our control, what that could potentially look like.

Okay, and that $20 million that you reduced revenue guidance by, did that get pushed into $27 million, or is that completely gone?

It's never completely gone. I think you can appreciate that as good as anybody. Because, you know, we're not competing as a particular company in the socket. The fact of the matter is that when our technology reads and it infringes, that opportunity remains. I will say again to answer your question, and just to drive it home, it's a matter of if. It's a matter of when, not if. It's a matter of when, not if. So none of that disappears. Repeating that, you've heard Dipti say that as well. So it's something that we're focused on closing. It's just a matter of timing.

All right. Thank you.

Your next question comes from Matthew Golinko, Maxim Group.

Hey, thanks for taking my questions. Can you expand on the court delays and what your expectation for that is? So, you know, how long are the delays from your current vantage point, and should we expect that the litigation spending that slips out of maybe fourth quarter lands somewhere in 27 where we see a higher level or not necessarily how it works out?

Hey, Matt, great to hear from you. It's a great question. So, in terms of court delays, there's many, but I'll give you a really simple example. So, as you know, in April, as it relates to Dish, you know, we filed suit against its parent company, or in addition, EchoStar. So, shortly thereafter, you know, they declared bankruptcy, and then all of that activity was stayed until that cleared. And they just emerged out of bankruptcy in October. So there was, by default, an unexpected pause when we filed that. So that expense pushes to the right. There's a couple other examples I can give that. But you picked up on that nuance. It's pushing things to the right in that regard. So the one thing that I would like to point to, and you're kind of hinting to it, is that we have a bit of a slide of expenses. But also, if you take a look at our operating expense guidance, that came down $10 million in aggregate as well. Half of that, I would dare say, is kind of that push to the right of legal. And the other half is, quite frankly, our great team and the expense management that we've done. So we've done a really good job of prioritizing. I would also say that we've done a great job of really kind of learning, evolving, and becoming more efficient in what we do. And frankly, it's not at a sacrifice of any short-term goals or long-term goals that we're trying to achieve. So, you know, net-net, that impact from an EODA perspective is about $10 million on average and not $20 million, which is the revenue range. We really are doing a good job as a management team of being cautious. And I would also say, if you kind of go through and do the math, if we end up at 415, which is our goal, and which we're focused to, we would be at the upper end of the prior EBITDA guidance that we had given on a much larger revenue target. So there speaks to the efficiency of our business.

Great. Thank you. And maybe as a follow-up, just to get a little bit of, I guess, insight into how things might work next year, should we expect any incremental spending in 2027 as you pursue opportunities for hybrid bonding in 2028?

I think you're going to see some increases in our overall R&D spending and SG&A. I think it's going to be kind of a normal steady state, and I don't think it'll be very far off from the models that are out there today. Okay. But however, you know, that's one trigger. But the fact of the matter is, when we see things going to be in high volume, and we see adoption, we need to act upon it, and we need to act quickly and aggressively. So, how we prioritize our dollars would be very much on capitalizing the opportunities that are in front of us. So, it's really about really having this great technology that we have and making sure that we're monetizing it.

And everyone, at this time, there are no further questions. I'll hand the conference back to Ms. Dipti Vichani for any additional or closing remarks.

Thank you, Operator. Thank you. Once again, I'm excited to be here and to dive deeper into our business and strategy in the coming months. I want to thank the Audia team for the warm welcome and their hard work in continuing to deliver results. I look forward to meeting many of you later this quarter as we attend two upcoming conferences, the annual Roth Technology Conference in New York in November, and then the annual Wells Fargo TMT Summit in California in December. Thank you for joining us today.

Once again, everyone, this does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.

And we're clear. Okay, thank you, Jeff. Appreciate everyone's work. Thanks, all. We'll go ahead and sign off now. Okay, thanks, all.