Interdigital, Inc. · NASDAQ:IDCC

Interdigital — Dougherty & Company 2016 Institutional Investor Conference

22 slides from Interdigital's conference presentation, Sep 28, 2016

  1. Slide 1: InterDigital Dougherty Conference

    InterDigital Dougherty Conference September 28, 2016 © 2016 InterDigital, Inc. All Rights Reserved.

  2. Slide 2: Forward-looking Statements

    Forward-­‐looking Statements • This presentation contains forward-­‐looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding InterDigital, Inc.’s current beliefs, plans and expectatio

  3. Slide 3: A Presence Focused on the World's Wireless Centers

    A Presence Focused on the World’s Wireless Centers ASIA L ABS: SEOUL 3 © 2016 InterDigital, Inc. All rights reserved.

  4. Slide 4: A Long History of Leadership in Mobile Technology

    A Long History of Leadership in Mobile Technology • Over four decades of mobile innovation, and pioneers in digital wireless • ~160 R&D staff in six R&D locations around the world • Our engineers have contributed inventions to IEEE, IETF, 3GPP, ITU, ETSI and MPEG standards, among others • InterDigit

  5. Slide 5: InterDigital Leadership in 3GPP Standards

    InterDigital Leadership in 3GPP Standards Our leadership and participation is comparable to much larger companies RAN WG1 RAN WG2 RAN WG3 Physical Layer MAC Protocol & Above Radio Network Architecture Chairman Chairman Chairman Satoshi Nagata Richard Burbidge Philippe Reininger NTT Docomo Intel Huaw

  6. Slide 6: A Track Record of Wireless Innovation, Participation & Leadership in Key Standards Organizations

    A Track Record of Wireless Innovation, Participation & Leadership in Key Standards Organizations • We cover a broad but Recent Leadership Positions related group of standards • Vice Chair 3GPP RAN2: 2013 – present bodies and industry • Vice Chair 3GPP RAN3: 2001-­‐2009 forums • OMA Board of Director

  7. Slide 7: InterDigital's Main Focus Areas, Driving Opportunities in Broad, Horizontal Markets

    InterDigital’s 3 Main Focus Areas, Driving Opportunities in Broad, Horizontal Markets HANDSETS & INTERNET OF ADVANCED CONNECTED DEVICES THINGS PLATFORMS TECHNOLOGY LICENSING AND LICENSING INCUBATION 7 © 2016 InterDigital, Inc. All Rights Reserved.

  8. Slide 8: LTE Technology: Driving Our Licensing Program

    LTE Technology: Driving Our Licensing Program Cumulative Number of InterDigital U.S. Patents & Applications 1800 Disclosed to ETSI for LTE* 1600 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 * The data in the table reflects the U.S. (i) patents, (ii) non-­‐provisional

  9. Slide 9: Ongoing Leadership in Key Technologies

    Ongoing Leadership in Key Technologies • 3G: InterDigital accounted for approximately 10% of the patents and patent applications judged likely to be essential to WCDMA – the third-­‐highest share out of more than 40 companies (May 2015) • 4G: InterDigital accounted for approximately 10% of the paten

  10. Slide 10: New Licensees Added to a Strong Base, with Opportunities that Remain

    New Licensees Added to a Strong Base, with Opportunities that Remain SOME INCLUDING RESEARCH …AND AN EXCITING PLATFORM NEW AND RENEWED LICENSES… COLLABORATION… FOR NEW MARKETS LAYERED ONTO A STRONG EXISTING BASE All third party trademarks, service marks and/or tradenames used herein are the property

  11. Slide 11: Moderate Penetration – Outsized Gains

    Moderate Penetration – Outsized Gains 3G/4G Handset Shipments (in millions) 2,000 In a market expected to 1,600 see continued moderate 1,200 growth, an additional 25% 800 of market penetration 400 would double the number -­‐ of handsets and terminal 40% MARKET 2016 2020 units licensed IN 2016 -­‐ 65

  12. Slide 12: Where We Play in the IoT Ecosystem

    Where We Play in the IoT Ecosystem IoT Connectivity and IoT SW & Services ANALYTICS and APPLICATION Middleware & data mgmt., Data Management Services / network & cloud mgmt. are NETWORK and CLOUD MANAGEMENT Analytics / Middleware projected to be $3B & $8B Enabling Technology IoT markets by 2021 (Ber

  13. Slide 13: Avanci Patent Licensing Platform

    Avanci Patent Licensing Platform • Separate entity formed to aggregate Avanci… 2G/3G/4G standard essential patents for IoT connectivity patent licensing programs • Seeks to license some end-­‐user products not addressed by InterDigital’s current licensing • Initial licensing programs: manufacturers

  14. Slide 14: Where We Play in the IoT Ecosystem

    Where We Play in the IoT Ecosystem IoT Connectivity and IoT SW & Services ANALYTICS and APPLICATION oneMPOWERTM -­‐ a oneM2M standards-­‐based IoT services platform NETWORK and CLOUD MANAGEMENT • Future-­‐proofs deployments • SW in sensors, devices, gateways and servers • Interworks with many other

  15. Slide 15: Where We Play in the IoT Ecosystem

    Where We Play in the IoT Ecosystem IoT Connectivity and IoT SW & Services ANALYTICS and APPLICATION Unique IoT operating environment that: • Enables public/private cloud as-­‐ a-­‐service solutions NETWORK and CLOUD MANAGEMENT • Easy/rapid integration of 3rd party value added sources • Agile – rapid

  16. Slide 16: Award-winning IoT Solutions

    Award-­‐winning IoT Solutions …and last week 2015 ABI Research Hot Tech Innovator 2016 Global IoT Platform 2015 IoT Nexus Competitive Strategy Innovation & Power Players Leadership and Innovators Shortlist – 2016 World Communication Best IoT Product at ARM 2016 Awards TechCon 2014 MarketsandMarkets

  17. Slide 17: The Result: Expanded Revenue Opportunities – With Outsized Profit Potential

    The Result: Expanded Revenue Opportunities – With Outsized Profit Potential HANDSETS & CONNECTED ASSUMING THE SAME OPERATING COST BASIS AS TODAY DEVICES A $100M increase in …could drive a A $441M Business in 2015 revenue… ~50% increase in operating income INTERNET OF THINGS Our Goal: A $75-­‐$100M B

  18. Slide 18: Growing Recurring Revenues, Careful Expense Control

    Growing Recurring Revenues, Careful Expense Control $400 $350 $178M in recurring $300 revenues through Q2 $250 2016, $258-­‐263M $200 expected through Q3* $150 $384-­‐409M in total $100 revenues expected millions $50 through Q3 2016*, $0 2012 2013 2014 2015 which would be up Recurring Revenue Pro Fo

  19. Slide 19: Continued Efforts to Return Value to Shareholders

    Continued Efforts to Return Value to Shareholders Return of Capital Since 2012, the company $250.0 has returned a total of $200.0 $664.5M in capital to $83.1 shareholders through a $23.7 $150.0 combination of buybacks, $28.9 regular dividends and a $100.0 special dividend, with a $152.7 $152.6 $20.9

  20. Slide 20: Strong Performance of Our Buyback Program

    Strong Performance of Our Buyback Program $60.00 2.500 • Since 2012 we’ve paid $50.00 2.000 $495.5 million to buy back our own stock Shares Repurchased (M's) $40.00 • That “portfolio” would now Average Price 1.500 $30.00 be valued at just under $1B 1.000 $20.00 • Our program’s Buyback ROI is $10.00

  21. Slide 21: Reconciliation of Pro Forma Operating Expense to Total Operating Expense

    2012 2013 2014 2015 Operating Expenses: Patent administration and licensing $ 126.3 $ 143.1 $ 133.8 $ 120.4 Development 67.9 64.7 75.3 72.7 Reconciliation Selling, general and administrative Repositioning Total Operating Expenses 37.4 12.5 $ 244.1 31.3 1.5 $ 240.6 37.8 39.8 -­ -­ $ 246.9 $ 232.9 of

  22. Slide 22: Thank you

    Thank you © 2016 InterDigital, Inc. All Rights Reserved.

InterDigital — Dougherty & Company 2016 Institutional Investor Conference on 6ix