Slide 1: Third Quarter 2024 Results
I N N O V A T I N G T O D A Y E M P O W E R I N G T O M O R R O W TM Third Quarter 2024 Results October 31, 2024
Slide 2: Disclaimers: Forward-Looking Statements
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 2 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, inc
Slide 3: Q3'24 Highlights
Q3’24 Highlights 10/31/2024 3©2024 InterDigital, Inc. All Rights Reserved.
Slide 4: Financial Highlights
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 4 Financial Highlights ✓ Q3 Revenue of $129 million, Adjusted EBITDAa of $65 million, Non-GAAP EPSa of $1.63, all above the top end of the outlook ✓ CE, IoT/Auto recurring revenue increased 52% y/y to $24 million ✓ Free cash flowa of $65 millio
Slide 5: Business Highlights
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 5 Business Highlights ✓ Held an Investor Day and announced annual recurring revenue target of $1 billion by 2030 ✓ Signed new license agreements with Oppo, TPV and Panasonic ✓ In Q4, signed a binding arbitration agreement to finalize the terms
Slide 6: License Agreement With OPPO Group signed in Q4
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 6 License Agreement With OPPO Group signed in Q4 ▪ Oppo group is one of the largest smartphone manufacturers based in China ▪ License covers global sales of Oppo, realme and OnePlus branded mobile devices ▪ All pending litigations between the p
Slide 7: Q3'24 Results
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 7 Q3’24 Results a Non-GAAP Measure / Please see appendix for GAAP to Non-GAAP reconciliations b Y/Y decrease is primarily driven by lower catch-up revenues in Q3'24 and the expiration of Huawei license agreement at the end of 2023 Revenue <8%>b
Slide 8: Q3'24 Revenue By Program
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 8 Q3’24 Revenue By Program $104M $87M 0 20 40 60 80 100 120 Q3'23 Q3'24 Recurring Catch Up $35M $41M 0 10 20 30 40 50 60 70 80 90 100 Q3'23 Q3'24 Recurring Catch Up Smartphone <16%>a CE, IoT/Auto +15% a Y/Y decrease is primarily driven by lower
Slide 9: Financial Results vs. Outlook
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 9 Financial Results vs. Outlook Q 3 ’ 2 4 R E S U L T S Q 3 ’ 2 4 O U T L O O K Revenue $128.7M $94M - $98M Adjusted EBITDAa $64.8M $36M - $39M Diluted EPS $1.14 $0.20 - $0.30 Non-GAAP EPSa $1.63 $0.70 - $0.80 a Non-GAAP Measure / Please see ap
Slide 10: FY24 Annual Guidance
FY24 Annual Guidance 10/31/2024 10©2024 InterDigital, Inc. All Rights Reserved.
Slide 11: Company Raises FY 2024 Guidance
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 11 Company Raises FY 2024 Guidance As of October 31, 2024 Q 4 ’ 2 4 O U T L O O K F Y 2 4 C U R R E N T O U T L O O K F Y 2 4 P R I O R O U T L O O K Revenue $239M - $249M $855M - $865M $690M - $740M Adjusted EBITDAa $180M - $190M $533M - $543M
Slide 12: Upcoming Investor Events
Upcoming Investor Events 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 12 November 19 RBC Tech Conference New York City November 20 Roth Tech Conference New York City
Slide 13: Background on InterDigital
Background on Interdigital 10/31/2024 13©2024 InterDigital, Inc. All Rights Reserved. As of October 31, 2024
Slide 14: InterDigital: Innovating Today, Empowering Tomorrow
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 14 Premier Team Essential Technology Development Company Introduction Long-term Growth Strategy Accelerating Business Momentum 01 0304 0205 InterDigital Innovating Today, Empowering Tomorrow
Slide 15: InterDigital Pioneering Wireless, Video and AI Research
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 15 InterDigital Pioneering Wireless, Video and AI Research 63% Adj. EBITDA Margina 82% Y/Y Increase Non-GAAP EPSa TOP CUSTOMERS: $1B Cash 2 0 2 3 F I N A NCIA L R E S U L T S ~3/4 Recurring Revenue $379M Returned to Shareholders $550M Revenue H
Slide 16: World-Class Leadership Team
World-Class Leadership Team Robert S. Stien Chief Communications & Public Policy Officer Ken Kaskoun Chief Growth Officer Joshua Schmidt Chief Legal Officer Michael Cortino Chief Information Officer Skip Maloney Chief People Officer Rich Brezski CFO Eeva Hakoranta Chief Licensing Officer 10/31/2024
Slide 17: 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. 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 17 $ RESEARCH & INNOVATION PATENT PORTFOLIO LICENSING PROD
Slide 18: We Focus on Foundational Technologies
We Focus on Foundational Technologies 10/31/2024 18©2024 InterDigital, Inc. All Rights Reserved. W I R E L E S S Cellular wireless - 4G/5G/6G WiFi and wireless local area networks V I D E O Video compression, transport and enhancement Immersive media compression, transport and enhancement A I Using
Slide 19: InterDigital Tech Underpins Surging Mobile Traffic
InterDigital Tech Underpins Surging Mobile Traffic 10/31/2024 19 2017 2022 2027 50 100 150 200 250 3000 10.8 EB 90.4 EB 282.8 EB Video Drives Surge in Mobile Data Traffic Estimated global media traffic by application category (in exabytes per month)* * One exabyte equals one million terabytes. Sourc
Slide 20: Our Innovations Help Drive Video Codec Evolution
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 20 Our Innovations Help Drive Video Codec Evolution 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 result from 3GPP document https://www.3gpp.
Slide 21: The Power of the Global Standards System
The Power of the Global Standards System 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 21 C O N S U M E R S A global system of standards helps ensure interoperability I M P L E M E N T E R S Standards like 5G lower barriers to entry for new entrants into a market like smartphones and benef
Slide 22: InterDigital Drives Standard Development
U N I T I N G P R I N C I P L E S Strong belief in global standards Focus on technology merits and neutral on product implementation decisions S T R O N G L E A D E R S H I P Participate in 100+ standard development organizations (SDO) Hold more than 100 leadership positions in these SDOs B R O A D
Slide 23: We Have Many Standard Development Leadership Positions
JVT 10/31/2024 23 We Have Many Standard Development Leadership Positions Cellular & WiFi Standards Video Standards Sphere of Influence Growing: More than 100 Leadership Positions in Wireless & Video Standards RAN2 Chair SA6 Chair ETSI Board Member ISAC ISG Chair RIS ISG Chair PDL Vice Chair SAI Vice
Slide 24: Recognized Global Innovation Leader
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 24 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 owne
Slide 25: Innovation Engine Fuels Evergreen IP Portfolio
Wireless Video Implementation DTV Broadcast & Home Network ~19,000 Assets >32,000 Assets 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 10/31/2024©2
Slide 26: Average Competitive Impact: Patent Quality Rankings
Average Competitive Impact InterDigital Ranks Among the Highest in Patent Quality for 5G, Video Codec, and WiFi Patents 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 26 Video Codec Patent Holders 5G Patent Holders Source: LexisNexis PatentSight Oct 2024, top 10 Patent Asset Index owners 5G
Slide 27: Accelerating Business Momentum
Accelerating Business Momentum 10/31/2024 27©2024 InterDigital, Inc. All Rights Reserved.
Slide 28: Licensing Success
Licensing Success Over 40 licenses worth > $3.1B closed since the start of 2021 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 28 2021 2024 #1 Chinese Smartphone vendor 2022 2023 Top-10 TV vendor Largest license in company history Major CE/IoT License 80% of 4G connected car market under li
Slide 29: Strong Revenue Growth, Margins and Return of Capital
$155M $208M $255M $345M $538M 43% 49% 56% 63% 63% 0% 10% 20% 30% 40% 50% 60% 70% $0M $100M $200M $300M $400M $500M $600M $359M $425M $458M $550M $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2020 2021 2022 2023 2024G $855M - $865M Strong Revenue Growth, Margins and Return of Capital 10/31/2024 29
Slide 30: Long-term Growth Strategy
Long-term Growth Strategy 10/31/2024 30©2024 InterDigital, Inc. All Rights Reserved.
Slide 31: Our Technologies Benefit the Economy and the World
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 31 Our Technologies Benefit the Economy and the World Source: GSMA The Mobile Economy 2024 5.6 billion people globally subscribed to a mobile service, including 4.7 billion who used the mobile internet Mobile technologies and services generate
Slide 32: We Address Three Attractive Markets
10/31/2024 32 We Address Three Attractive Markets Sources: Counterpoint Research, OMDIA 1 Includes only value for Consumer Electronics and IoT Devices Market 2024E TAM Key Market Dynamic ’24 – ’27E CAGR Significant Customers CONTENT & CLOUD SERVICES ~$380B High growth with increasing focus on profit
Slide 33: Clear Pathway to Growth
10/31/2024 33 Clear Pathway to Growth 2023 2030 SMARTPHONE I n c r e a s e p e n e t r a t i o n E n h a n c e v a l u a t i o n d u r i n g r e n e w a l s CE, IOT/AUTO I n c r e a s e p e n e t r a t i o n E x p a n d m a r k e t c o v e r a g e S T R E A M I N G & C L O U D S E R V I C E S G r o
Slide 34: Strong Runway for Continued Smartphone Growth
~70%~25% ~5% Strong Runway for Continued Smartphone Growth 1.2B global device shipments 2024 Long Tail In Negotiation Licensed1 Long Tail 1. Samsung and Lenovo in binding arbitration • Large global market, projected to grow with 3% CAGR 2024-27 • Revenue growth from licensing remaining top OEMs • Dr
Slide 35: Good Momentum in CE - Large Opportunity Remains
Good Momentum in CE - Large Opportunity Remains Licensing coverage for PCs and Tablets based on HEVC - e.g. Amazon licensed for WLAN Licensing coverage for TVs based on our DTV patents – e.g. LG licensed for HEVC and VVC Deals with major OEMs such as Apple, Samsung, Lenovo, Sony, LG Licensed % globa
Slide 36: Strong Growth Opportunity in Automotive and IoT
Strong Growth Opportunity in Automotive and IoT Sources: Counterpoint Research, Omdia 85% of 4G auto market licensed 5G auto market driving value growth 2024E 2027E ~60 ~75 2024E 2027E Others Healthcare Enterprise Industrial PoS Smart Meters Asset Tracking ~200 ~350 10/31/2024©2024 InterDigital, Inc
Slide 37: SVoD and AVoD Are Our Focus Verticals
10/31/2024 37 SVoD and AVoD Are Our Focus Verticals Source: OMDIA 2024 TAM 2027 TAM TAM CAGR $240 B $140 B $170 B $190 B $190 B $16 B $20 B $5 B $6 B +13%+11% +7%+6% -1% SVoD AVoD GLOBAL PAY-TV VIDEO CONFERENCING CLOUD GAMING ©2024 InterDigital, Inc. All Rights Reserved. $330 B
Slide 38: Significant Growth Potential Lies Ahead
$352M $404M $408M $22M $74M $54M $141M $0 $200 $400 $600 $800 $1,000 2020 2021 2022 2023 2030 Target Recurring Catch-up Significant Growth Potential Lies Ahead $337M $359M $425M $458M $550M 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 38 Recurring revenue growth across Smartphone, CE and
Slide 39: Capital Allocation Priorities
Capital Allocation Priorities Strong cash flow maintains balance sheet strength, funds organic investment in research, and enables significant share reduction Maintain fortress balance sheet Financial strength is a strategic asset Organic investment in business Reinvest ~50% of recurring revenue int
Slide 40: Target Financial Model for 2030
Target Financial Model for 2030 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 40 60%+ Powerful Operating Leverage drives Adjusted EBITDA Margina Target $1B+ Annualized Recurring Revenue 14%+ Annual Growth Target High Margin Drives Strong Cash Flow $600M+ Adjusted EBITDAa Target Well positi
Slide 41: Key Takeaways
10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 41 Key Takeaways World-class leadership and functional teams across the board Accelerating momentum for R&I, standard development, patent portfolio creation and licensing driven by continuing investment and strong execution We have a clear stra
Slide 42: Appendix
Appendix 10/31/2024 42©2024 InterDigital, Inc. All Rights Reserved.
Slide 43: Non-GAAP Financial Measures
Non-GAAP Financial Measures 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 43 Adjusted EBITDA and Adjusted EBITDA margin are supplemental non-GAAP financial measures that InterDigital believes provide investors with important insight into the Company's ongoing business performance. InterDig
Slide 44: Non-GAAP Reconciliation (Adjusted EBITDA)
Non-GAAP Reconciliation 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 44 (In millions) 2020 2021 2022 2023 Q3'24 Q3'23 Q3'24 Q4'24 Current Full Year 2024 Prior Full Year 2024 Net income attributable to InterDigital, Inc. 45$ 55$ 94$ 214$ 34$ 48$ $6 - 9 $118 - $126 $343 - 351 $205 - $238$20
Slide 45: Non-GAAP Reconciliation (Non-GAAP EPS)
Non-GAAP Reconciliation 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 45 (In millions, except per share data) 2020 2021 2022 2023 Q3'24 Q3'23 Q3'24 Q4'24 Current Full Year 2024 Prior Full Year 2024 Net income attributable to InterDigital, Inc. 45$ 55$ 94$ 214$ 34$ 48$ $6 - 9 $118 - $126 $3
Slide 46: Non-GAAP Reconciliation: Free Cash Flow
Non-GAAP Reconciliation 10/31/2024©2024 InterDigital, Inc. All Rights Reserved. 46 2024 Cash Flow Data: Q3 Net cash provided by operating activities 78$ Purchases of property and equipment (1) Capitalized patent costs (12) Free cash flow $ 65 NOTE: Sums may not equal total due to rounding NOTE: Cert