Good morning. And welcome to the First Quarter 2025 Earnings Call. I am France, and I’ll be the operator assisting you today. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Raiford Garrabrant, Head of Investor Relations. Please go ahead.

Thank you, France, and good morning, everyone. Welcome to InterDigital’s first quarter 2025 earnings conference call. I am Raiford Garrabrant, Head of Investor Relations for InterDigital. With me on today’s call are Liren Chen, our President and CEO; and Rich Brezski, our CFO. Consistent with prior calls, we will offer some highlights about the quarter and the company, and then open the call up for questions. For additional details, you can access our earnings release and slide presentation that accompanied this call on our investor relations website. Before we begin our remarks, I need to remind you that in this call, we will make forward-looking statements regarding our current beliefs, plans and expectations, which are not guarantees of future performance and are made only as of the date hereof. Forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements. These risks and uncertainties include those described in the risk factor sections of our 2024 annual report on Form 10-K and in our other SEC filings. In addition, today’s presentation may contain references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the supplemental materials posted to the Investor Relations section of our website. With that taken care of, I will turn the call over to Liren Chen.

Thanks, Raiford. Good morning, everyone. Thanks for joining us today. In our last call, we provided annual guidance for 2025 with revenue of between $660 million and $760 million. This guidance highlights the increasing momentum of our business and the multiple growth opportunities that we have identified and expect to achieve through the rest of this year. Today, I’m pleased to share that we have made significant headway in achieving our goal and reconfirm our 2025 annual guidance. During this quarter, we licensed Vivo Mobile, a major smartphone manufacturer, to drive revenue above the top end of our guidance and increase our annual recurring revenue to an all-time record level. We were also once again recognized as one of the world’s leading innovators, demonstrated our cutting-edge technology at a Mobile Congress Trade Show, and shortly after the quarter closed, we signed another major license agreement with HP in our consumer electronics and IoT program. Our revenue, adjusted EBITDA and non-GAAP EPS for Q1 were all above the top end of our guidance. The revenue from our smartphone program more than doubled year-over-year. Our annualized recurring revenue is up 30% year-over-year at an all-time record of more than $0.5 billion. Rich will go over all the numbers in detail in his section. The program we have made gives us a very strong base from which to execute our strategy and drive long-term growth for the company. The long-term stable nature of our licensing agreement, with over 90% of our revenue coming from long-term fixed-fee agreements, provides an incredibly strong platform from which to invest in our research, share our innovations through license and deliver shareholder value. As some of you may be aware, Vivo is a top 10 global smartphone manufacturer with a significant market share, shipping over 100 million devices per year. Our new agreement with Vivo follows our new agreement with OPPO during Q4 last year. We now have seven of the top 10 largest manufacturer smartphone vendors and almost 80% of the entire global smartphone market under license. The Vivo agreement also represents another significant step towards our goal of achieving $500 million in annual recurring revenue in our smartphone program by 2027. Adding to our recent momentum, at the start of the second quarter, we also announced a new multiyear licensing agreement with HP, which licenses HP personal computers to our WiFi and video decoding technologies. HP is one of the world’s largest PC manufacturers. With this agreement, we have licensed more than 50% of the PC market. This is also another significant milestone as we continue to drive growth in our consumer electronics and IoT licensing program. I’m also pleased that both HP and Vivo licenses, like the vast majority of our license agreements, were signed through amicable negotiations. With the addition of Vivo and HP contracts, the cumulative total contract value that we have signed since 2021 is now more than $3.6 billion. As I mentioned in the prior earnings call, we are in a binding arbitration to settle the final terms of our license with Samsung for mobile devices. The parties finished all the hearings last October, and we expect to have a final decision soon. As a reminder, Samsung already agreed to take a license to our portfolio starting from January 1st of 2023, and this binding arbitration will determine the final terms of the license. In the first quarter, we built on our strong track record of returning capital to shareholders by increasing our dividend from $0.45 per share to $0.60 per share. Since Q3 of last year, we have increased our dividend by 50%. Our success in our licensing program is only possible because of the quality of research and the leadership of engineers across wireless, video, and AI. InterDigital is one of the few companies that leads in the development of foundational technology in all these three areas. In the first quarter, for the fourth year in a row, we were recognized as one of the world’s top 100 innovators in an analysis which looks at both the impact of our innovation today and its likely impact in the future. Our engineers are already closely involved in the early stages of 6G, which is beginning to take shape and which we believe will help drive our growth across multiple verticals well into the 2030s. Also in the first quarter, at Mobile Congress in Barcelona, we showcased the way in which we drive the evolution of wireless, video, and AI. At this year’s event, senior engineers from each of our three labs demonstrated how our research is changing connectivity in areas like immersive video, sensing in wireless networks, and the optimization of AI applications. In the first quarter, we also announced our two Inventors of the Year, one from our Wireless Lab and the other from our Video Lab. We are a company of inventors, and as I tell our teams internally, our Inventor of the Year is the most important accolade that we announce each year. Both of this year’s winners are experienced engineers who have dedicated their careers to making wireless networks smarter and more efficient, to improve connectivity in areas like IoT and XR, and to develop next-generation video through more advanced compression and wider deployment of AI. This dedication to research, combined with our execution across our licensing programs, continues to differentiate InterDigital and provide us with a powerful platform for growth. And with that, I’ll let Rich talk you through our first quarter numbers in more detail.

Thanks, Liren. I’m pleased to report that 2025 is off to a great start, with Q1 revenue, adjusted EBITDA and non-GAAP EPS all exceeding the high end of our guidance range. This performance was powered by our new license agreement with Vivo, a top smartphone manufacturer based in China. The new agreement with Vivo, together with higher-than-expected variable royalties, drove total revenue of $211 million. This exceeds both our initial top-end guidance for Q1 total revenue of $116 million and our updated increased top-end guidance of $206 million that we announced at the time we signed Vivo. This compares to our strong first quarter revenue of $264 million last year, when the signing of our Samsung TV license drove $160 million of catch-up revenue, albeit with related revenue share, which I’ll cover in a moment. Our annualized recurring revenue or ARR for the first quarter of 2025 increased 30% year-over-year to $503 million, which is a record level. The previously mentioned license with Vivo, under our smartphone program, led the way. In the past several years, we have rebuilt our revenue pipeline by renewing major licenses with Apple and Samsung, and we also added multiple leading smartphone vendors from China. We have grown our share of the smartphone market under license from about 50% to roughly 80%. As a result, we have made significant progress towards our goal of $500 million in ARR from smartphones by 2027, having increased smartphone revenue by $120 million. Our subscription-based IP-as-a-service model offers a high level of visibility and provides a reliable source of cash flow, even in the face of an uncertain economic environment. This enables us to continue to fuel our innovation engine and drive future revenue growth. Based on the strength of our intellectual property and the huge markets built upon it, we believe we are on track to grow ARR at a double-digit CAGR towards our 2030 target of $1 billion plus. Our adjusted EBITDA for the first quarter of nearly $160 million increased 22% year-over-year and equates to an adjusted EBITDA margin of 76%, an increase of 27 points compared to 49% a year ago. The increase in adjusted EBITDA margin was largely attributable to a decrease in operating expense, as most of the $69 million in revenue share we reported in Q1 2024 related to the catch-up revenue under the Samsung TV agreement we signed last year. Non-GAAP EPS rose 18% year-over-year to $4.21 and exceeded our increased guidance of $3.60 to $3.90 per share. Cash from operations and free cash flow were negative in Q1, with outflows of $20 million and $47 million, respectively. As a reminder, this is not uncommon on a quarterly basis and is related to the timing of payments from our licensees. We continue to expect double-digit growth in free cash flow for 2025 over the strong levels we reported in 2024. The strong cash flow inherent in our business, combined with a cash balance of nearly $900 million, supports our capital allocation priorities. First, we aim to maintain a strong balance sheet, as financial strength is a strategic asset. Second, we will continue to make organic investments in the business, and in recent years, we have invested around 50% of recurring revenue into research and portfolio development. Third, we will be opportunistic in exploring inorganic growth opportunities, though they are not required to achieve our 2030 financial targets. And fourth, we will continue returning excess cash to shareholders by way of share repurchases and dividends. In Q1, we returned $21 million to shareholders through buybacks and dividends. After accounting for additional share repurchases in April, we currently have approximately $216 million remaining on our buyback authorization. Looking forward to Q2, we already announced an important new agreement with HP that drives our expectations for another strong quarter. We expect Q2 revenues will be $165 million to $175 million from existing contracts, including catch-up sales. Based only on existing contracts, we expect an adjusted EBITDA margin of about 65% and non-GAAP diluted earnings per share of $2.67 to $2.90. Our second quarter guidance does not include the impact of any new agreements or arbitration results we may sign or receive over the balance of the second quarter. Our strong first quarter results and our expectations for a strong Q2 have us well on track to meet our full year 2025 targets, and we are reaffirming our prior guidance of revenue in the range of $660 million to $760 million. We continue to expect adjusted EBITDA in the range of $400 million to $495 million with non-GAAP earnings per share of $9.69 to $12.92. With that, I’ll turn it back to Raiford.

Thanks, Rich. Before we move to Q&A, I’d like to mention that we’ll be attending a number of investor events in Q2, including the William Blair Growth Conference in Chicago, the Baird Consumer, Tech & Services Conference in New York City, the Bank of America Tech Conference in San Francisco, and the ROTH London Conference. Please reach out to your representatives at those firms if you’d like to schedule a meeting. In addition, we are hosting our Annual Meeting of Shareholders, which is virtual, on June 11 at 2 p.m. At this point, we are ready to take questions.

Thank you. And as of now, the first question comes from the line of Scott Searle from ROTH Capital. Please go ahead.

Hey. Good morning. Liren, Rich, Raiford, congrats on getting Vivo across the finish line.

Thanks, Scott.

Maybe just quickly, too, I want to clarify on the Q2 guidance. These are all existing contracts that are in hand, so the big one that’s happened so far in the quarter to date is HP, so that $40 million increase is HP and/or maybe other smaller accounts, nothing coming in from anticipated Samsung arbitration or other Chinese-based OEMs, is that correct?

Yeah. That’s right, Scott. So Q2 guidance has set off existing contracts in hand today and does not include anything we may sign over the balance of the year, and I noted also does not include any arbitration results we may receive.

Gotcha. And then if I could, and then I’ll get back in the queue, Liren, maybe from a macro level, kind of the geopolitical environment, how that is impacting or not impacting discussions in terms of your timelines and engaging with those customers? And Rich, on the convert, now it moves into current accounts. I think within the Q, you talk about it being at current price levels, maybe 3 million shares. I’m wondering if you could take us through kind of what you anticipate to happen as it relates to the convert, if you expect it to be converted, and how we should be treating that from an earnings basis going forward? Thanks.

Yeah. Hey. Good morning, Scott. I’ll take the first question. Regarding the macro geopolitical environment, as well as the current tariff situation, so far we don’t see any impact on our business. As you are aware, our business surrounds the development of foundational technology, sharing them through the open global standard process, and then licensing primarily through long-term fixed fee agreements, which by their nature do not change quarter-by-quarter due to the fluctuation of shipment during the term of the contract. So, obviously, the situation is pretty dynamic, and we are keeping a close monitor of the situation.

And Scott, regarding the convert, so while I’m current, it actually doesn’t mature until spring of 2027. That’s a function of where the stock price is and certain features in that. But typically, and where we’ve been in the money in the past, and my understanding more generally is that typically those things don’t convert early until they’re even further in the money, because the convert holders have optionality with the current instrument.

But Rich, you don’t have the ability to call it, is that correct?

So, there are certain abilities over the term of that agreement, and there’s always, as we’ve done in the past, always an ability to enter into a transaction. We’re always looking at our capital structure and figuring out what’s the best next step. So nothing to report there, but something that we actively monitor.

Great. Thanks so much. I’ll get back in the queue. Congrats on the quarter.

Thank you, Scott.

And your next question comes from Anja Soderstrom from Sidoti. Please go ahead.

Hi, and thank you for taking my questions. Congratulations on the great progress you're making. I have a follow-up question about the Samsung arbitration. It seems like that has been delayed a bit. Do you have any updates or a timeframe on that?

Yeah. See, Anja, this is Liren. So, we currently do not have any new updates, as you are aware, the last hearing we did was late last year, October, since then, the arbitrator panel has been essentially considering all the evidence and writing their decision. We remain confident about the merits of our case, but we don’t have any new updates from them as of today.

Okay. Thank you. And then in terms of the Disney litigation, what’s going on there? Is anything happening, or is it going to be dragged out, you think?

Yeah. So the Disney litigation, as you are aware, we filed the litigation early February. Since then, we have some confirmation of the court dates, which generally starts in Q4 this year and expands into early next year. We are encouraged by all the dates being set promptly in different jurisdictions. We, again, look forward to demonstrating the merits of our case in the court proceedings.

Okay. Thank you. And you mentioned inorganic opportunities. How actively are you looking at that, and what do you see in the market for that right now?

Yeah. I didn’t mean to signal anything there, Anja. It’s just really the natural order of our approach to capital allocation, which is to maintain a strong balance sheet, make organic investment, look at inorganic opportunities, and then return capital to shareholders. So it’s really just reciting our longstanding strategy towards capital allocation.

Okay. Thank you, and that was all from me.

And your next question comes from Blayne Curtis from Jefferies. Please go ahead.

Thanks for taking my question and nice results, guys. I wanted to just drill in on the consumer IoT side. So you’ve made some good progress. I was wondering if you can just walk us through the rest of the year in terms of your best prospects, as well as milestones to be aware of there?

Yeah. Hey, Blayne. Good morning. This is Liren. So on the consumer IoT side, we continue to have the same multi-pillar approach. The largest opportunity continues to be the smart TV. As you are aware, we signed the largest opportunity in Samsung TV last year. We actually worked on multiple opportunities with LG, TCL, and SysON, and the three of them essentially are just before the number two position. We also announced with HP that we have more than 50% of the PC market under license, so that’s a very significant achievement for us. Additionally, there's a collection of IoT opportunities in the settler space and non-setters that we are pursuing overall. Lastly, our IoT program also includes the Connected Car Program, where we are a founding member for a vantage platform for both 4G and 5G. Through that platform, we have achieved quite a few new license agreements on top of the 4G progress, which we were already over 80% coverage. More than half a dozen new 5G car vendors signed up in the last quarter or so. So we are making really good progress.

Thanks for that. And just a modeling question, and I might be doing something wrong, but just trying to bridge EBITDA to EPS. Can you just comment on the tax rate in June? You’ve been below that, I’ve been penciling in 17%, you’ve been below that. So maybe just tax rate for the year and any other moving pieces on interest and shares with the convert?

Yeah. Sure. So, yeah, the tax rate was low in the first quarter and projects a little bit lower for the year. Part of what’s driving that is when we book our stock-based comp, we had an increase in the share price driven by the company’s performance over the last year. When that vests, that results in a larger tax deduction and pushes down our rate a little bit for the quarter. So that’s projecting to be a little bit lower overall for the year as a result. That’s probably the primary thing that you’re looking at. On the, I think you asked about the dilution, so I’ll just mention that on GAAP EPS, it’s in my view, almost double counting. You’re counting the dilution on the convert and then all the dilution on the warrant without the benefit of the hedge that we have against the convert. So we make a denominator adjustment for that in our non-GAAP EPS. You can see all the details about that in the sensitivity table in the footnotes that describe that.

Thank you.

And your next question comes from Arjun Bhatia from William Blair. Please go ahead.

Rick, thank you. And I’ll add my congrats on getting the Vivo deal signed, nicely done. One kind of broader question for you, Liren, on the video streaming opportunity. I think it was in March that there was a deal signed between Nokia and Amazon on video streaming. I’m curious, just as you look at your opportunity in this market, how that might impact either the Disney litigation or conversations you're having with other streaming services and if this can be a catalyst to speed up some of those negotiations and get those deals signed?

Yeah. Hey, Arjun. Good morning. So, yes, you are right. We have seen the public announcement of Nokia’s deal with Amazon that covers their streaming services. From our perspective, we believe that’s a positive development for our whole industry. Obviously, Nokia and Amazon are both very large and sophisticated vendors. The fact that both parties are recognizing that large streaming functions require a license of the relevant intellectual property rights is a good development. Having said that, though, I always believe that InterDigital's licensing program rides on the merits of our own patent portfolio. So we intend to demonstrate the value of our portfolio through our negotiation and enforcement process, particularly with Disney.

Thank you for your question. Regarding your long-term goal of reaching $500 million in recurring revenue from smartphones, how do you see the breakdown between growing revenue from current contracts at renewal and acquiring business from the top 10 smartphone manufacturers? You already have seven of the top 10 OEMs. Is the expected growth mainly from securing contracts with the remaining three, or will it also come from increases during renewals with companies like Xiaomi or potential new deals in the coming years?

Yeah. Hey, Arjun. So our goal to reach $500 million by 2027 for recurring revenue is primarily based on our need to add the customer that’s using our technology for a long period as a licensee. That’s our primary goal to reach that target. Regarding renewals, we take every renewal very seriously, obviously, but we also look at how much they have benefited over time. That’s dependent on their market share changes, their product mix changes, and sometimes it also depends on our negotiation with them for different customer category regarding products or what they have expanded to. It’s a multi-parameter negotiation, and we always try to negotiate a deal that’s fair to both parties that reflects the value of our intellectual property. But back to your question, our smartphone licensing program is primarily based on our need to add those new customers.

All right. Perfect. Thank you, Liren.

Yeah.

There are no further questions at this moment, and now I would like to turn the call back over to Liren Chen, Chief Executive Officer, for the closing remarks. Please go ahead.

Thank you, Operator. Before we close, I’d like to thank our employees for their dedication and contribution to InterDigital, as well as our many partners and licensees for a strong quarter. Thank you to everyone who joined today’s call, and we look forward to updating you on our progress next quarter.