InterDigital, Inc. (IDCC) June 10, 2026 Annual General Meeting Transcript

Good afternoon, ladies and gentlemen. I am Doug Hutchison, Chairman of the Board of Directors of Interdigital Incorporated. Welcome to the company's 2026 Annual Meeting of Interdigital Shareholders. We're pleased to host a fully virtual annual meeting again this year, which allows us to be more inclusive and reach a greater number of shareholders. I would like to present to you the other members of the Board of Directors, Derek Averly, Samir Armali, Joan Gilman, John Kritschmacher, Jay Markley, Gene Rankin, and Laren Chen, the company's president, chief executive officer, and board member. I now ask that Laren introduces the company's executive management team.

Thank you, Doug. Good afternoon, everyone. I'll start by introducing Rich Bresky, Chief Financial Officer, and Josh Smith, Chief Legal Officer and Corporate Secretary. And also here today are Ken Cushcombe, Chief Groups Officer, Skip Maloney, Chief People Officer, Julia Mattis, Chief Licensing Officer, Rajesh Tankaj, Chief Technology Officer, Rob Stein, Chief Communications and Public Policy Officer, and Rayford Garibrand, VP of Investor Relations.

Thank you, Laren. Finally, I would like to note that Matt Schiavo and Vinit Kotak of Pricewaterhouse LLP, the company's independent registered public accounting firm, are with us today. The agenda for this year's meeting is as follows. First, Josh Schmidt, our Chief Legal Officer and Corporate Secretary, will conduct the formal portion of the meeting. Next, Liren Chin, our President and Chief Executive Officer, will present brief remarks. Finally, after that session, we'll answer questions as appropriate. I will now ask Josh to conduct the formal portion of the meeting.

Thank you, Mr. Chairman. Members of the audience, please note that this meeting is being recorded and webcast live. After the formal meeting has adjourned, we will provide time for questions. Only shareholders of record as of the record date who have entered their 16-digit control number on the web portal will be able to ask questions in the designated field on the portal. As stated in the rules of conduct, please be succinct in your questions and limit each question to a single topic. I have received an affidavit showing the proper notice of this meeting together with a notice of internet availability of proxy materials containing instructions on how to access the company's 2025 annual report and 2026 proxy statement and how to vote online were mailed to all shareholders who owned InterDigital Common Stock as of April 15, 2026, the record date for this meeting. As of the record date, there were a total of 25,859,613 shares of the company's common stock outstanding. The company has appointed Broadridge Financial Solutions to act as Judge of Elections, and representing Broadridge here today is Rhoda Anderson. I have received the Judge of Elections oath and certificate of quorum showing that, based upon the number of shares represented in person or by proxy at today's meeting, a quorum is present. Note that the polls will be opening at this time any shareholders of record as of the record date who have not yet voted or who wish to change their vote may do so by clicking the voting button on the web portal and following the instructions there shareholders who have sent in proxies or who have already voted via the internet or telephone and who do not want to change their vote do not need to take any further action the polls will close after i've described all the proposals if any shareholder would like to make a comment regarding any of the proposals, please submit your comments through the web portal. The first order of business is listed as proposal number one in the proxy statement, the election of eight directors. Each director will hold office until the company's 2027 annual meeting of shareholders and until his or her respective successor is elected and qualified. Mr. Averly, Mr. Armali, Mr. Chen, Ms. Gilman, Mr. Hutchinson, Mr. Kritzmacher, Mr. Markley, and Ms. Rankin are the current nominees for election to our Board of Directors. I'll pause for a moment as we check for comments or questions about this proposal.

There is no discussion on this proposal, so we will move to the next proposal.

The next item of business is listed as Proposal No. 2 in the proxy statement, the approval of the bylaws amendment to allow for officer exculpation as permitted by a Pennsylvania law. I'll pause for a moment as we check for comments or questions about this proposal. There is no discussion on this proposal, so we will move to the next proposal. The next item of business is listed as proposal number three in the proxy statement, the advisory resolution to approve executive compensation. I'll pause for a moment as we check for comments or questions about this proposal.

There is no discussion on this proposal, so we will move to the next proposal.

The final item of business is listed as proposal number four in the proxy statement, the ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year ending December 31, 2026. I'll pause for a moment as we check for comments or questions about this proposal. I would like to remind you that representatives from PricewaterhouseCoopers are present to answer questions, if necessary.

There is no discussion on this proposal, so we will proceed.

I now declare the polls for the 2026 annual meeting closed. Mr. Chairman, the preliminary report of the judge of elections shows that each of the eight directors nominated for election has been duly elected. The bylaw amendment to allow for officer exculpation as permitted by Pennsylvania law has been duly adopted and approved. The advisory resolution on executive compensation has been duly approved. And the appointment of Price Waterhouse Cooper's LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026 has been duly ratified. That concludes the formal portion of the meeting, which is now adjourned. and now I will turn the meeting back over to Doug.

I, on behalf of the board, would like to take a moment to thank all of the InterDigital colleagues for their dedication and contributions to InterDigital. In particular, we want to recognize the progress that LEARN and the entire leadership team has made on our strategic plans and execution. Now I will turn the meeting over to Rayford. Thank you, Doug.

Before we begin the next portion of our meeting, I want to remind you that our comments today will include statements that are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended, including trends and expectations relating to our industry and our future business plans, results, and prospects. Actual results may differ materially from those contained in any forward-looking statement, as a result of certain risks and uncertainties, including those described in the risk factors section of our 2025 Form 10-K and from time to time in our filings with the Securities and Exchange Commission. All forward-looking statements are made as of today, and we assume no obligation to update any such statements except as required by law. In addition, today's discussion may contain references to non-GAAP financial measures, such as adjusted EBITDA and non-GAAP earnings per share. Reconciliations of these and certain other non-GAAP financial measures are included in our Financial Metrics Tracker, which is available on the Investor Relations section of our website. And now, let me turn it over to Liren Chen, our President and CEO, for some remarks.

Thank you, Riefer. Good afternoon, everyone. Thanks again for joining us today. 2025 was a year of record performance and continued progress across our business. Our researchers strengthened their leadership in the standard that shapes wireless, video, and AI. Our patent portfolio reached a new record. And in licensing, we completed the most valuable agreement in our company's history, with the total value of contracts we have signed since 2021 now at $4.7 billion. That combination drove our financial performance to new heights and gave us strong momentum through 2026 and beyond. Total revenue for the year was $834 million, the second highest in our history. Adjusted EBITDA, non-GAAP GPS, and annualized recurring revenue reached all-time highs. And we generated record operating cash flow of more than half a billion dollars. This performance was rightly recognized. Forbes ranked us number one in their 2026 list of American most successful mid-cap company. Newsweek named us one of America's greatest companies. Fortune included us among its 150th growing companies. And Time placed us on the list of American growth leaders. And for the fifth time in a row, LexusNexus recognized us among the world's 100 most innovative companies. In our smartphone program, we signed the largest license in our history with Samsung, worth more than a billion dollars. We added a new agreement with two more top 10 vendors, Weibo and Honor. In total, we have licensed eight of the 10 largest smartphone manufacturers under license, covering around 85% of the global market. Our smartphone program generated record revenue of $679 million in 2025, and its annualized recurring revenue is now close to our long-term target of $500 million. In consumer electronics and IoT, we signed a new agreement with HP, the world's largest PC maker, taking our license share of the global PC market past 50%. In our video service program, we made tangible progress. Our research is foundational to today's nearly $500 billion streaming industry, and we believe video service represents a significant long-term growth opportunity for the company. In 2025, we launched enforcement proceedings against Disney and Amazon, and in our case against Disney, we have so far secured five injunctions from courts in Brazil and Germany. We always prefer to reach license agreements through constructive negotiations, and most of our licenses are signed without litigation. But where negotiation does not succeed, enforcement is sometimes a necessary step, and our track record shows that it ultimately leads to a long-term license agreement. The success of our licensing program is only possible because of strength of our research. In 2025, we grew up patent portfolios by 14% to more than 38,000 grant patents and applications worldwide, the largest in our history. Our engineers hold more than 110 leadership positions in world's major standard organization, and we are one of only three companies globally and the only company in the United States to hold multiple chair positions in the standard development organization for 5G and the future 6G wireless standard. So leadership matters most where the next generation technology is being defined. 6G commercial deployment is expected around 2029 and we are actively shaping its development today, including the AI native network designs, and the integrated sensing capability that we believe will define cellular connectivity through 2030s. In video, our acquisition of UK-based AI startup DeepRinder late last year added depth to our video and AI research capabilities. As the industry moved towards AI-native method to improve efficiency across the entire video value chain, this position as well as video is consumed across a growing range of devices and services. Looking ahead, we see a clear runway across our business. Inter-digital strengths are simple. We hire the best people in our industry. We start early, and we stay persistent. We invest in solving the hard problems before they become obvious. We need the standard body, which leads to broad sharing of our technology on a global scale. We build a patent portfolio that reflects the value of our groundbreaking innovation and we execute across our licensing program. This is how we have earned our place across generation of wireless, radio, and AI innovation, and it's how we intend to keep on delivering value for our shareholders and consumers worldwide. Thank you for your continued support.

Thank you, Liren. And now we can proceed to the Q&A portion of the meeting. Rich, the first question is for you, and it's about the warrants. The question is, can they currently be exercised, and have any been exercised, and when do they expire?

Okay, thanks for the question. The warrants mature between September 2027 and April 2028. So, as a result, none have been exercised to date, and you can find more information on the warrants in Note 5 to our Form 10-2 for March of 26.

Okay, thank you for that, Rich. Our next question is also for you.

It asks, have you been buying back stock this quarter, and what actions are you taking to minimize the dilution effects of convertible debt issue? okay yeah uh so yes we have been buying stock uh this quarter and uh the stock buyback uh which has been ongoing you know we've been in the market buying stock for a number of years uh that that does serve to offset the dilution uh from the uh from the convert uh if you go back to the 22 issuance of that Convert, we bought back well more stock to well more than offset that dilution.

Okay. Thank you, Rich. Our third and final question is a follow-up and also for you related to the warrants. It asks, how many warrants can be issued? Are any of the warrants hedged? and can you address the net result on shares?

So, again, I'll refer you to node 5 of our Form 10-Q. I think in total there's 6 million warrants that have been issued and those warrants are outstanding. What the warrant holders do regarding hedging those positions, I can't speak to that. Okay.

Thank you, Rich. Those are all the questions we had So now I'll turn it back to Liren for closing remarks.

Thank you, Riefer. Before we close, I'd like to thank all our colleagues for their dedication and contribution to InterDigital, as well as our shareholders, partners, and customers. Thank you, everyone, who joined today's meeting, and we look forward to updating you on our progress in the future.

This concludes today's meeting. Thank you for attending. You may now disconnect and have a wonderful rest of your day.