Business
InterDigital Announces Financial Results For Third Quarter 2020
21% year-over-year increase in recurring revenue drives fourfold increase in operating income WILMINGTON, Del., Nov. 05, 2020 (GLOBE NEWSWIRE) --
About this update from Interdigital, Inc.
[{"type":"text","content":"21% year-over-year increase in recurring revenue drives fourfold increase in operating income\nWILMINGTON, Del., Nov. 05, 2020 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile and video technology research and development company, today announced results for the third quarter ended September 30, 2020.\n Third Quarter 2020 Financial Highlights Third quarter 2020 recurring revenue was $87.0 million, compared to recurring revenue of $72.1 million in third quarter 2019, a 21% year-over-year increase. This increase was driven by eight new patent license agreements signed over the last twelve months, including Huawei and ZTE. Third quarter 2020 total revenue was $87.5 million, compared to $72.5 million in third quarter 2019. Third quarter 2020 operating expenses were $72.1 million, compared to $68.7 million in third quarter 2019 and $0.5 million lower than in second quarter 2020. Third quarter 2020 operating income was $15.4 million, compared to $3.8 million in third quarter 2019. Third quarter 2020 tax provision includes discrete benefits of $18.5 million, which primarily relates to the expected amendment of a prior year tax return and the reversal of a tax reserve. Third quarter 2020 net income1 was $23.8 million, or $0.76 per diluted share, compared to net income of $2.2 million, or $0.07 per diluted share, in third quarter 2019. “While continuing to prioritize the safety of our employees, we’ve also executed effectively this quarter, driving strong results and highlighting the resilience of our recession resistant business,” noted William J. Merritt, President and CEO of InterDigital. “Our performance reflects the incredible operating leverage in our model, which saw a 21% increase in recurring revenue drive a fourfold increase in year-over-year operating income. Going forward, we remain focused on pursuing agreements with remaining unlicensed handset companies and expanding our consumer electronics licensing business.” Additional Highlights In third quarter 2020, the company recorded $101.3 million of cash provided by operating activities, compared to $125.5 million in third quarter 2019. The company generated $85.4 million of free cash flow2 in third quarter 2020, compared to $117.0 million of free cash flow in third quarter 2019. In each period, free cash flow was largely driven by cash receipts from existing pate...