Interdigital, Inc. · NASDAQ:IDCC

Interdigital — 27th Annual Needham Growth Conference (January 2025)

34 slides from Interdigital's conference presentation, Jan 14, 2025

  1. Slide 1: 27th Annual Needham Growth Conference

    27th Annual Needham Growth Conference January 14, 2025 ©2025 InterDigital, Inc. All Rights Reserved. 1/14/2025 1

  2. Slide 2: Disclaimers

    Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Exchange Act. Such statements include information regarding our current beliefs, plans and expectations, including, without limitation, the matters set forth below. W

  3. Slide 3: InterDigital: Innovating Today, Empowering Tomorrow

    01 Company Introduction Long-term 05 InterDigital 02 Premier Team Growth Strategy Innovating Today, Empowering Tomorrow 04 03 Accelerating Business Essential Technology Momentum Development ©2025 InterDigital, Inc. All Rights Reserved. 1/14/2025 3

  4. Slide 4: InterDigital Pioneering Wireless, Video and AI Research

    InterDigital Pioneering Wireless, Video and AI Research HIGHLIGHTS Industry-leading Long-term customers Enabling ecosystem World-class team Driving foundational patents Evergreen Subscription-like revenue, Over two billion devices Led by seasoned research in wireless, and $5.7T economic industry vet

  5. Slide 5: World-Class Leadership Team

    World-Class Leadership Team Decades of industry experience. Strong track record. Drive deep collaboration and superb execution Liren Chen Rajesh Pankaj Eeva Hakoranta Rich Brezski CEO CTO Chief Licensing CFO Officer Michael Cortino Ken Kaskoun Skip Maloney Joshua Schmidt Robert S. Stien Chief Inform

  6. Slide 6: Business Model: A Virtuous Cycle of Innovation

    Business Model: A Virtuous Cycle of Innovation We are a foundational R&D company. We share our innovation through the standards process and monetize our technology through IP licensing. PATENT LICENSING PORTFOLIO $ RESEARCH & PRODUCT INNOVATION IMPLEMENTERS STANDARD TECHNOLOGY DEVELOPMENT SHARING ©2

  7. Slide 7: We Focus on Foundational Technologies

    We Focus on Foundational Technologies We solve the most complex problems in the system. The technology we created is broadly applicable to many industries WIRELESS VIDEO AI Cellular wireless - 4G/5G/6G Video compression, transport Using AI for wireless and video and enhancement WiFi and wireless loc

  8. Slide 8: InterDigital Tech Underpins Surging Mobile Traffic

    InterDigital Tech Underpins Surging Mobile Traffic Video Drives Surge in Mobile Data Traffic Estimated global media traffic by application category (in exabytes per month)* 2017 10.8 EB 2022 90.4 EB 2027 282.8 EB 0 50 100 150 200 250 300 * One exabyte equals one million terabytes. Source: Ericsson M

  9. Slide 9: Our Innovations Help Drive Video Codec Evolution

    Our Innovations Help Drive Video Codec Evolution Uncompressed: 11,600GB Compressed AVC: ~24 GB(1) VP9: ~15 GB HEVC: ~14 GB(1) AV1: ~11 GB VVC: ~9 GB(2) 4K Movie 130-Minute Run Time (1) http://www.iam-media.com/litigation/what-will-tv-cost-you-putting-price-hevc-licences (2) Approximated based on the

  10. Slide 10: The Power of the Global Standards System

    CONSUMERS A global system of standards helps ensure interoperability The Power of the Global IMPLEMENTERS Standards like 5G lower barriers to Standards entry for new entrants into a market like smartphones and benefit from System economies of scale OPERATORS AND SERVICE PROVIDERS Standards increase

  11. Slide 11: InterDigital Drives Standard Development

    InterDigital Drives Standard Development UNITING PRINCIPLES STRONG LEADERSHIP BROAD COLLABORATIONS Strong belief in global standards Participate in 100+ standard Collaborate with many industry development organizations (SDO) partners and leading universities Focus on technology merits and neutral on

  12. Slide 12: We Have Many Standard Development Leadership Positions

    We Have Many Standard Development Leadership Positions Cellular & WiFi Standards RAN2 SA6 ETSI Board Member RIS ISG PDL SAI Steering Committee SA Board of Governors AIML Standing Internet WG Chair Chair ISAC ISG Chair Chair Vice Chair Vice Chair Co-Chair Policy & Procedures Committee Vice Chair C/SA

  13. Slide 13: Recognized Global Innovation Leader

    2022: 2023: 2024: Recognized Global Innovation Leader For the third year in a row, LexisNexis recognized InterDigital amongst the World’s 100 Most Innovative Businesses. Innovation Momentum 2024: The Global Top 100, “represents the world’s leading patent owners with the highest innovation momentum.”

  14. Slide 14: Innovation Engine Fuels Evergreen IP Portfolio

    Innovation Engine Fuels Evergreen IP Portfolio Our patent portfolio grew almost 70% between 2017 & 2024 with the addition of video & DTV related technologies and continuing growth of wireless assets 2017: 2024: ~19,000 Assets >32,000 Assets Portfolio is evergreen, growing by ~5 new patents each day

  15. Slide 15: InterDigital Ranks Among the Highest in Patent Quality

    InterDigital Ranks Among the Highest in Patent Quality for 5G, Video Codec, and WiFi Patents Average Competitive Impact 5G Patent Holders Video Codec Patent Holders WiFi Patent Holders 0 5 10 15 0 2 4 6 8 0 2 4 6 8 InterDigital Company # 1 InterDigital Company # 2 Company # 2 Company # 2 Company # 3

  16. Slide 16: Accelerating Business Momentum

    Accelerating Business Momentum ©2025 InterDigital, Inc. All Rights Reserved. 1/14/2025 16

  17. Slide 17: Licensing Success

    Licensing Success Over 40 licenses worth > $3.1B closed since the start of 2021 2021 2022 2023 2024 #1 Chinese Smartphone Largest license in Licensee since #1 TV vendor vendor company history 1995* Top-10 TV vendor Major CE/IoT License HEVC license #2 Chinese smartphone vendor 80% of 4G connected ca

  18. Slide 18: Strong Revenue Growth, Margins and Return of Capital

    Strong Revenue Growth, Margins and Return of Capital $900 Revenue $855M - $865M Non-GAAP EPSa $800 24% CAGR $14.00 > 6.5X growth $700 $12.00 $600 $10.00 $500 $8.00 $400 $14.84 $6.00 $300 $550M $9.23 $425M $458M $4.00 $200 $359M $2.00 $5.08 $100 $3.73 $2.27 $0 $0.00 2020 2021 2022 2023 2024G 2020 202

  19. Slide 19: Long-term Growth Strategy

    Long-term Growth Strategy ©2025 InterDigital, Inc. All Rights Reserved. 1/14/2025 19

  20. Slide 20: Our Technologies Benefit the Economy and the World

    Our Technologies Benefit the Economy and the World 5.6 billion Mobile technologies 5G is projected to people globally and services Enables 35 million add nearly $1 subscribed to a generate $5.7 jobs across the trillion to the mobile service, trillion economic wider mobile including 4.7 billion value

  21. Slide 21: We Address Three Attractive Markets

    We Address Three Attractive Markets ’24 – ’27E Significant 2024E TAM CAGR Customers Key Market Dynamic Market Increasing ~1.2B Units SMARTPHONES ~3% <10 concentration of (~$450B) top OEMs High shipment growth ~1.6B Units CE, IoT/AUTO ~6% ~100 with fragmentation (~$340B)1 across segments High growth

  22. Slide 22: Clear Pathway to Growth $1B+

    Clear Pathway to Growth $1B+ ARR Target 2030 2023 2030 ~$500M $347M ~$300M+ ~$200M $60M (by 2027) $0 SMARTPHONE CE, IOT/AUTO STREAMING & Increase penetration Increase penetration CLOUD SERVICES Enhance valuation during renewals Expand market coverage Grow video services licensing program ©2025 Inter

  23. Slide 23: Strong Runway for Continued Smartphone Growth

    Strong Runway for Continued Smartphone Growth SMARTPHONES GLOBAL MARKET 1.2B global device shipments 2024 Long Tail • Large global market, projected to grow with 3% CAGR 2024-27 • Revenue growth from licensing ~5% remaining top OEMs • Driving higher value from key accounts during renewal ~25% ~70% L

  24. Slide 24: Good Momentum in CE - Large Opportunity Remains

    Good Momentum in CE - Large Opportunity Remains PCs: 284M 2024 TABLETS: 118M 2024 TVs: 205M 2024 % global device shipments % global device shipments % current focus area1 shipments 11% 17% 21% 36% 11% 72% 39% 53% 40% 51% Licensed Primary Opportunity Long Tail Deals with major OEMs such as Approx. 40

  25. Slide 25: Strong Growth Opportunity in Automotive and IoT

    Strong Growth Opportunity in Automotive and IoT PASSENGER VEHICLE SHIPMENTS (M) CELLULAR IOT SHIPMENTS (M) 5G Active Licensing Program 4G CAGR ~10% ~75 CAGR ~20% ~60 5G auto 5Gmarket auto market driving ~85% of driving value 4Gofauto 85% value growth Others market 4G auto growth Healthcare licensed

  26. Slide 26: SVoD and AVoD Are Our Focus Verticals

    SVoD and AVoD Are Our Focus Verticals 2024 TAM 2027 TAM TAM CAGR VIDEO SVoD AVoD GLOBAL PAY-TV CONFERENCING CLOUD GAMING +11% +13% +6% +7% $330 B -1% $240 B $170 B $190 B $190 B $140 B $16 B $20 B $5 B $6 B Source: OMDIA ©2025 InterDigital, Inc. All Rights Reserved. 1/14/2025 26

  27. Slide 27: Significant Growth Potential Lies Ahead

    Significant Growth Potential Lies Ahead Recurring revenue growth across Smartphone, CE and IoT, and Content and Cloud Services $1B+ ARR $1,000 $800 $600 $550M 14% CAGR $458M $141M $425M $54M $400 $359M $74M $22M $200 $404M $408M $337M $352M $0 2020 2021 2022 2023 2030 Target Recurring Catch-up ©2025

  28. Slide 28: Capital Allocation Priorities

    Capital Allocation Priorities Maintain fortress Organic investment Inorganic Return Excess cash balance sheet in business investment to shareholders Financial strength Reinvest ~50% of Opportunistic and $1.3B+ in share is a strategic asset recurring revenue strategic repurchases since ‘11 into resea

  29. Slide 29: Target Financial Model for 2030

    Target Financial Model for 2030 $1B+ Annualized Powerful Operating High Margin Drives Recurring Revenue Leverage drives Strong Cash Flow Well 14%+ 60%+ $600M+ positioned to drive Annual Adjusted Adjusted value going Growth EBITDA EBITDAa forward Target Margina Target Target a Non-GAAP financial meas

  30. Slide 30: Key Takeaways

    World-class leadership and functional teams across the board Accelerating momentum for R&I, standard development, Key patent portfolio creation and licensing driven Takeaways by continuing investment and strong execution Our technologies are critical to devices and services of multiple industries, g

  31. Slide 31: Appendix

    Appendix ©2025 InterDigital, Inc. All Rights Reserved. 1/14/2025 31

  32. Slide 32: Non-GAAP Financial Measures

    Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA margin are supplemental non-GAAP financial measures that InterDigital believes provide investors with important insight into the Company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income attributable to

  33. Slide 33: Non-GAAP Reconciliation

    Non-GAAP Reconciliation Year Ended December 31, Outlook Full Year 2020 2021 2022 2023 (In millions) 2024 Net income attributable to InterDigital, Inc. $ 45 $ 55 $ 94 $ 214 $343 - $351 Net loss attributable to non-controlling interest (7) (13) (2) (3) - Income tax (provision) benefit (7) 15 26 24 75

  34. Slide 34: Non-GAAP Reconciliation

    Non-GAAP Reconciliation Full Year Outlook Full Year 2020 2021 2022 2023 (In millions, except per share data) 2024 Net income attributable to InterDigital, Inc. $ 45 $ 55 $ 94 $ 214 $343 - $351 Share-based compensation 10 29 22 36 47 Acquisition related amortization 44 42 42 41 33 Other operating ite

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