InterDigital, Inc. · NASDAQ:IDCC

InterDigital — Investor Day (September 2024)

88 slides from InterDigital's investor day presentation, Sep 10, 2024

Slide 1: Investor Day
Investor Day September 10, 2024 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
Slide 3: 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
Slide 4: Agenda
Agenda Company Overview and How Innovation Drives IP Licensing Capturing Growth Strategy Rajesh Pankaj, Growth Opportunities Liren Chen, Chief Technology Officer Eeva Hakoranta, President & CEO Chief Licensing Officer Financial Overview Closing Comments Questions & Rich Brezski, Liren Chen, Answers
Slide 6: Company Introduction and Long-term Growth Strategy
01 Company Introduction Long-term 05 InterDigital 02 Premier Team Growth Strategy Innovating Today, Empowering Tomorrow 04 03 Accelerating Business Essential Technology Momentum Development ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 6
Slide 7: 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
Slide 8: 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
Slide 9: 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
Slide 10: 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 ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 10
Slide 11: 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.”
Slide 12: We are a Company of Inventors
We are a Senior Director VP Technology • Wireless Radio Company • Wireless radio • Joined IDCC in 2001 • Joined IDCC in 2006 • 3700+ patents • ~1600 patents • Based in Canada, originally of Inventors • Based in Canada from Albania Senior Director Senior Principal Scientist • Wireless radio • Video c
Slide 13: 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
Slide 14: InterDigital Ranks Among the Highest in Patent Quality
InterDigital Ranks Among the Highest in Patent Quality for 5G and Video Codec Patents Average Competitive Impact 5G Patent Holders Video Codec Patent Holders 0 4 8 12 16 0 2 4 6 8 InterDigital Company #1 Company #2 Company # 2 Company #3 InterDigital Company #4 Company # 4 Company #5 Company # 5 Com
Slide 15: 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
Slide 16: 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
Slide 17: 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
Slide 18: Our Approach to Sustainability
Our Approach We focus on the things that matter the most to our industry, our employees to Sustainability and our stakeholders. MSCI: A Rating Human Capital Creating a healthy, inclusive and safe work environment Sustainalytics: Top 1/3 where all colleagues feel valued, respected and enabled to achi
Slide 19: Accelerating Business Momentum
Accelerating Business Momentum Last four yearsa have been highly successful, our company has never been stronger World-Class Leadership Team Invention creation 3X Top 5 Portfolio in both 5G and Video1 (HEVC & VVC) 2X 4.5X 40+ Revenue Non-GAAP EPSb New license agreements with (19% CAGR) (46% CAGR) $2
Slide 20: Driving Long-Term Growth
Driving Long-Term Growth SMARTPHONE CE, IOT/AUTO STREAMING & CLOUD SERVICES Increase penetration Increase penetration Grow video services Enhance valuation Expand market coverage licensing program during renewals ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 20
Slide 21: Clear Pathway to Growth: $1B+ ARR Target 2030
Clear Pathway to Growth $1B+ ARR Target 2030 2023 2030 ~$500M $347M ~$300M+ ~$200M $60M (by 2027) $0 STREAMING & SMARTPHONE CE, IOT/AUTO CLOUD SERVICES ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 21
Slide 22: Agenda
Agenda Company Overview and How Innovation Drives IP Licensing Capturing Growth Strategy Rajesh Pankaj, Growth Opportunities Liren Chen, Chief Technology Officer Eeva Hakoranta, President & CEO Chief Licensing Officer Financial Overview Closing Comments Questions & Rich Brezski, Liren Chen, Answers
Slide 24: Research & Innovation Highlights
We are recognized as 01 leaders in innovation Solve real-world problems 02 Research & in wireless, video and AI Innovation Highlights Fundamental research 03 leading to standards Robust innovation engine 04 fueling record-breaking pace of invention creation and patent filings ©2024 InterDigital, Inc
Slide 25: Three Areas of Foundational Research
Three Areas of Foundational Research WIRELESS VIDEO AI Cellular wireless - 4G/5G/6G Video compression, transport Using AI for wireless and video and enhancement WiFi and wireless local area networks Video coding for use by AI Immersive media compression, transport and enhancement Our research and pa
Slide 26: Video and Media Over Wireless
Video and Media Over Wireless 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 Mobility Report Video
Slide 27: Video Codec Evolution
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 result from 3GPP document
Slide 28: Cellular Wireless Evolution
Cellular Wireless Evolution How long would it take to download a 9GB movie? 3G:~2 Mbps 4G: ~60 Mbps 5G:~500 Mbps ~10 hours ~20 minutes ~2 minutes InterDigital’s innovations are part of every G ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 28
Slide 29: Innovation and Technology Development Strategy
Innovation and Technology Development Strategy From early research to standards Pre-standard work and Standards Early research thought leadership development Develop technology and create a Thought leadership informed by Bring our innovation to standards path for standardization our early research O
Slide 30: Research Collaboration Amplifies Our Impact
Research Collaboration Amplifies Our Impact University Collaborations Industrial Collaborations All trademarks, logos and brand names are the property of their respective owners and are used herein for identification purposes only. Use of these marks, logos, and/or names do not reflect or imply any
Slide 31: We Lead The Industry
We Lead The Industry 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/SAB Chair Chair Video Standards JVT
Slide 32: Standard Essential Patents
Standard Essential Patents Researchers and Patent Attorneys Collaborate to Create Them Patent Standard Innovation Prosecution Essential Patent Stage Stage Creation RESEARCHERS PATENT ATTORNEYS RESEARCHERS PATENT ATTORNEYS Researchers need to know Ensure patent Create high what’s needed to create Kee
Slide 33: 5G and 6G Timelines
5G and 6G Timelines Standards Development is a Multi-Year Process 2023 2024 2025 2026 2027 2028 2029 2030 Framework Requirements and Evaluation and Specification Approval Evaluation Criteria Consensus Building Pre-6G Studies 3GPP (3G Partnership Project) Work Start of 6G Studies on 6G 1st Set of 6G
Slide 34: 6G Vision and InterDigital
6G Vision and InterDigital 5G capabilities will remain important in 6G and will be enhanced Our inventions fueling 5G will continue to be important for 6G Our long history of research in cellular wireless 5G gives us a head start compared to late-comers Our early research and the resulting invention
Slide 35: 6G Research to Standard Example
6G Research to Standard Example I N T E GRAT ED S E NS ING A N D MEDIA OVER 6G CO MMU NIC ATI ON InterDigital contributed to positioning Joint research work between wireless and video capabilities of 4G and 5G team to jointly optimize video and multimedia transport over 6G networks 6G is extending i
Slide 36: Video Research to Standards Example
Video Research to Standards Example F I LM G R A I N S U S TAINABI LITY I N V I D E O InterDigital’s research is critical to efficiently InterDigital’s innovation introduced the concept compressing and recreating film grain in current of pixel value reduction video standards We are leading the resea
Slide 37: AI Research to Standards Example
AI Research to Standards Example A I I N WI R E LE SS N E T W ORKS VIDEO CODING FOR AI Bringing AI and wireless team together Existing video compression algorithms are designed so to add AI innovation to wireless that the result is pleasing to humans We are researching video coding strategies for Jo
Slide 39: Agenda
Agenda Company Overview and How Innovation Drives IP Licensing Capturing Growth Strategy Rajesh Pankaj, Growth Opportunities Liren Chen, Chief Technology Officer Eeva Hakoranta, President & CEO Chief Licensing Officer Financial Overview Closing Comments Questions & Rich Brezski, Liren Chen, Answers
Slide 41: 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 standard process and monetize our technology through IP licensing PATENT LICENSING PORTFOLIO $ RESEARCH & PRODUCT INNOVATION IMPLEMENTERS STANDARD TECHNOLOGY DEVELOPMENT SHARING ©2024 In
Slide 42: Our Licensing Strategy Provides Stability and Growth
Our Licensing Strategy Provides Stability and Growth EXECUTION STABILITY GROWTH $2.8B of contracted revenue Our subscription like revenue There is plenty of opportunity secured through our expert stream is secured by our for growth in licensing with the dealmaking in the last four years key long-ter
Slide 43: The Elements of Licensing Success
The Elements of Licensing Success: InterDigital Has It All! World-class Foundational Best-in-class licensing team with Large addressable research enforcement deep market markets and great IP capabilities expertise ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 43
Slide 44: Driving Strong Execution
Driving Strong Execution Over 40 licenses closed since 2020 driving > $2.8B of contract value 2021 2022 2023 2024 #1 Chinese Largest license in Licensee Smartphone vendor company history since 1995* #1 Television Top-10 TV vendor Major CE/IoT License HEVC license; vendor Court wins in cellular 80% o
Slide 45: 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
Slide 46: Clear Pathway to Growth: $1B+ ARR Target 2030
Clear Pathway to Growth $1B+ A R R T a r g e t 2030 2023 2030 ~$500M $347M ~$300M+ ~$200M $60M (by 2027) $0 CONTENT & SMARTPHONE CE, IOT/AUTO CLOUD SERVICES ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 46
Slide 47: 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 4% remaining top OEMs • Driving higher value from key 17% accounts during renewal 51% 28%
Slide 48: Smartphone Opportunity
Consolidated market means that we need to close only a handful of accounts to reach very high market coverage Smartphone Renewals drive higher value from more Opportunity advanced technologies, e.g. higher portion of 5G and new video codecs Room to Grow Our key account license agreements are long te
Slide 49: Clear Pathway to Growth: $1B+ ARR Target 2030
Clear Pathway to Growth $1B+ A R R T a r g e t 2030 2023 2030 ~$500M $347M ~$300M+ ~$200M $60M (by 2027) $0 CONTENT & SMARTPHONE CE, IOT/AUTO CLOUD SERVICES ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 49
Slide 50: CE, IoT / Auto Markets
CE, IoT / Auto Markets 2024E ’24 – ’27E Significant Shipments CAGR Customers Key Market Dynamic Market CONSUMER Commoditization ~1.1B ~2% 20+ ELECTRONICS across categories High growth, some CELLULAR IoT ~0.4B ~20% 40+ fragmentation across product segments Growth + enhanced CONNECTED CARS ~60M ~10% ~
Slide 51: 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% 35% 36% 11% 53% 72% 44% 51% Licensed Primary Opportunity Remaining Deals with major OEMs such as Approx. 40
Slide 52: Strong Growth Opportunity in Cellular Automotive and IoT Licensing
Strong Growth Opportunity in Cellular Automotive and IoT Licensing 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 H
Slide 53: Clear Pathway to Growth: $1B+ ARR Target 2030
Clear Pathway to Growth $1B+ A R R T a r g e t 2030 2023 2030 ~$500M $347M ~$300M+ ~$200M $60M (by 2027) $0 CONTENT & SMARTPHONE CE, IOT/AUTO CLOUD SERVICES ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 53
Slide 54: Our Rich Video Innovation is Fueling the Media Industry
Our Rich Video Innovation is Fueling the Media Industry Pioneering Media Ubiquitous Streaming Next Generation Technicolor’s 100+ Innovations enabling Forefront of future year legacy of media HD viewing for development providing innovations such as first consumers, even higher quality cameras, color
Slide 55: Our Video Codecs Enable the Content Industry
Our Video Codecs Enable the Content Industry Compression Enables Video Uncompressed, it would … With video Streaming Industry take multiple days compression, it takes to download a movie… minutes … And Allows Consumers to Enjoy Media Uncompressed, you could … With video watch no movies on a compress
Slide 56: 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 ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 56
Slide 57: Video Services Nearing the Size of the Smartphone Market
Video Services Nearing the Size of the Smartphone Market V I D E O S E R V I C ES S MA R TP HONES ~$500B ~$570B 2027E Market Value 2027E Market Value Revenue Target: $300M+ Revenue Target: $500M <0.1% of Global Market Value ~0.1% of Global Market Value Sources: Counterpoint, OMDIA ©2024 InterDigital
Slide 58: 2024 and Beyond
2024 and Beyond EXECUTION Close agreements with remaining major smartphone OEMs ENGAGEMENT Deepen and broaden engagements in CE, IoT/Auto where the impact of our innovation is growing EXPANSION Capitalize on growing blue ocean opportunity in content & cloud services ©2024 InterDigital, Inc. All Righ
Slide 59: Agenda
Agenda Company Overview and How Innovation Drives IP Licensing Capturing Growth Strategy Rajesh Pankaj, Growth Opportunities Liren Chen, Chief Technology Officer Eeva Hakoranta, President & CEO Chief Licensing Officer Financial Overview Closing Comments Questions & Rich Brezski, Liren Chen, Answers
Slide 61: InterDigital's Attractive Financial Model
01 Innovation Drives Topline 05 InterDigital’s 02 Continued Investment Drives Attractive Operational Efficiency Drives Innovation Financial Leverage Model 04 03 Cash Flow Drives Leverage Drives Return of Capital Cash Flow ©2024 InterDigital, Inc. All Rights Reserved. 9/10/2024 61
Slide 62: Innovation Drives Topline
Innovation Drives Topline Double-digit CAGR in both Smartphone and CE, IoT/Auto licensing programs $900 $800 $690M - $740M $700 19% CAGR* $600 $550M $500 $458M $81M $425M $400 $359M $104M $68M $24M 15% CAGR $300 $467M $200 $323M $352M $353M $100 $0 2020 2021 2022 2023 2024 Guidance Smartphone CE, Io
Slide 63: Licensing Momentum Has Driven Growth In Backlog
Licensing Momentum Has Driven Growth In Backlog Apple and Samsung Subscriptions Help Secure Long Term Revenue Contracted Future Revenue $1,800M Samsung $1,600M Apple Other $1,400M $1,200M $1,000M $800M $600M $400M $200M $0M 2020 2021 2022 2023 This table includes estimated revenue related to our Sam
Slide 64: Operational Discipline Drives Leverage
Operational Discipline Drives Leverage A D J U S T E D E B I T D A a: > 2 . 5 x G r o w t h NON-GAAP EPSa : >4.5x Growth $500M 63% 70% 56% b 56% 60% $400M 49% 43% 50% $300M 40% $10.33 $200M 30% $9.23 $397M $345M $255M 20% $100M $208M $5.08 $155M 10% $3.73 $2.27 $0M 0% 2020 2021 2022 2023 2024G 2020
Slide 65: Strong Free Cash Flow Yield
Strong Free Cash Flow Yield F C F Y I E L D a: A v g . 2 0 1 1 - 2 0 2 3 Peer 1 7.5% InterDigital 7.0% Peer 2 4.9% Peer 3 4.7% Peer 4 3.9% Peer 5 3.9% Peer 6 3% Peer 7 3% Peer 8 3% Peer 9 0.9% 0% 2% 4% 6% 8% Source = Factset / 2023 compensation peer group with positive FCF Yield / FCF Yield = Free c
Slide 66: Consistent Adjusted EBITDA Growth
Consistent Adjusted EBITDA Growth QUARTERLY TREND: TRAILING 3 YR QUARTERLY AVG: Timing of payments can drive FCFa up or down Adj EBITDAa is highly correlated to FCFa over time and in any given quarter removes quarterly variability $400M $80M $350M $70M $300M $60M $250M $200M $50M $150M $40M $100M $3
Slide 67: Capital Allocation Priorities
Capital Allocation Priorities Maintain fortress Organic investment Inorganic Return Excess cash balance sheet in business investment to shareholders Financial strength ~$0.2B annual Opportunistic and $1.3B+ in share is a strategic asset investment in strategic repurchases since ‘11 research and IP p
Slide 68: Robust Return Of Capital
Robust Return Of Capital > $1.8B CUMULATIVE RETURNED SINCE FIRST DIVIDEND IN 2011 $2,000M $1,800M $1,600M $1,400M $1,200M $1,000M $800M $600M $400M $200M $0M 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Dividends Repurchases Through June 30, 2024 ©2024 InterDigital, Inc. All
Slide 69: 45% Reduction In Share Count Since 2011
45% Reduction In Share Count Since 2011 REDUCTION IN TOTAL SHARES OUTSTANDING: Indexed to FY11 InterDigitalInterDigital Peer 1 Peer 1 Peer 2 Peer 2 Peer 3 Peer 3 Peer 4 Peer 4 Peer 5 Peer 5 Peer 6 Peer 6 Peer 7 Peer 7 Peer 8 Peer 8 Peer 9 Peer 9 -30% -20% Peer 10 -10% 0% 10% 20% 30% 40% 50% Source =
Slide 70: 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 14% CAGR $550M $458M $141M $425M $54M $400 $359M $74M $22M $200 $404M $408M $337M $352M $0 2020 2021 2022 2023 2030 Target Recurring Catch-up ©2024
Slide 71: Growth in Subscription Revenue with High Margins
Growth in Subscription Revenue with High Margins Target well surpasses “Rule of 40” 2030 TARGET Revenue $1,000M+ 14% Recurring Revenue CAGR $600M+ 60% Adjusted Adj. EBITDA EBITDAa Margina Rule of 40b ~74%+ a Non-GAAP financial measure. Refer to appendix. Calculated based on an assumed 60% Adjusted E
Slide 72: IDCC has Outperformed
IDCC has Outperformed 250 250 230 230 210 210 190 190 170 170 150 150 130 130 110 110 90 90 70 70 50 50 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23
Slide 73: Well-Positioned To Drive Value
Well-Positioned To Drive Value Value drivers include sustained growth, margin expansion and return of capital P/E: Non-GAAPa Market Cap to Adjusted EBITDAa 88x 50x 62x 33x 32x 41x 35x 33x 25x 25x 21x 20x 16x 15x 11x 12x 8x 9x 8x 7x 5x 2x *As of Aug 30, 2024 / Source: Factset / Five peers excluded du
Slide 74: Key Takeaways
Key Takeaways Subscription Powerful Operating $1B 2030 ARR Target Like Revenue Leverage drives translates into Well 14%+ 60%+ $600M+ positioned to drive Annual Adjusted Adjusted value going Growth EBITDA EBITDAa forward Target Margina Target Target a Non-GAAP financial measure. Refer to appendix. Ca
Slide 75: Agenda
Agenda Company Overview and How Innovation Drives IP Licensing Capturing Growth Strategy Rajesh Pankaj, Growth Opportunities Liren Chen, Chief Technology Officer Eeva Hakoranta, President & CEO Chief Licensing Officer Financial Overview Closing Comments Questions & Rich Brezski, Liren Chen, Answers
Slide 77: Closing Comments
World-class leadership and functional teams across the board Closing Comments Accelerating momentum for R&I, standard development, patent portfolio creation and licensing driven Last four years have by continuing investment and strong execution been highly successful, Our technologies are critical t
Slide 78: Agenda
Agenda Company Overview and How Innovation Drives IP Licensing Capturing Growth Strategy Rajesh Pankaj, Growth Opportunities Liren Chen, Chief Technology Officer Eeva Hakoranta, President & CEO Chief Licensing Officer Financial Overview Closing Comments Questions & Rich Brezski, Liren Chen, Answers
Slide 79: Please stand by Q&A will begin soon
Please stand by Q&A will begin soon 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
Slide 80: Q&A
Q&A 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
Slide 81: Thank You!
Thank You! 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
Slide 83: 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
Slide 84: Non-GAAP Reconciliation
Non-GAAP Reconciliation Full Year 2024 2020 2021 2022 2023 (In millions) Outlook Net income attributable to InterDigital, Inc. $ 45 $ 55 $ 94 $ 214 $205 - 238 Net loss attributable to non-controlling interest (7) (13) (2) (3) - Income tax (provision) benefit (7) 15 26 24 55 - 60 Other income (expens
Slide 85: Non-GAAP Reconciliation
Non-GAAP Reconciliation Full Year 2024 2020 2021 2022 2023 (In millions, except per share data) Outlook Net income attributable to InterDigital, Inc. $ 45 $ 55 $ 94 $ 214 $205 - 238 Share-based compensation 10 29 22 36 42 Acquisition related amortization 44 42 42 41 33 Other operating items 9 30 3 1
Slide 86: Non-GAAP Reconciliation
Non-GAAP Reconciliation Full Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (In millions, except per share data) Net cash provided by (used in) operating activities $ (34) $ 178 $ 218 $ 242 $ 124 $ 434 $ 316 $ 147 $ 89 $ 163 $ 130 $ 286 $ 214 Purchases of property & equipment
Slide 87: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2023 2024 LTM Q3 Q4 Q1 Q2 Q2'24 (In millions, except per share data) Net income attributable to InterDigital, Inc. $ 48 $ 39 $ 82 $ 110 $ 278 Share-based compensation 10 9 9 10 38 Acquisition related amortization 10 10 8 8 37 Other operating items - - - (3) (3) Other non-oper
Slide 88: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2023 2024 LTM Q3 Q4 Q1 Q2 Q2'24 (In millions, except per share data) Net income attributable to InterDigital, Inc. $ 48 $ 39 $ 82 $ 110 $ 278 Net loss attributable to non-controlling interest (1) - - - (1) Income tax (provision) benefit 9 (6) 19 24 46 Other income (expense) &

InterDigital — Investor Day (September 2024) on 6ix

InterDigital — Investor Day (September 2024)

Slide 1: Investor Day

Slide 2: Welcome

Slide 3: Disclaimers

Slide 4: Agenda

Slide 5: Overview and Growth Strategy

Slide 6: Company Introduction and Long-term Growth Strategy

Slide 7: InterDigital Pioneering Wireless, Video and AI Research

Slide 8: World-Class Leadership Team

Slide 9: Business Model: A Virtuous Cycle of Innovation

Slide 10: We Focus on Foundational Technologies

Slide 11: Recognized Global Innovation Leader

Slide 12: We are a Company of Inventors

Slide 13: Innovation Engine Fuels Evergreen IP Portfolio

Slide 14: InterDigital Ranks Among the Highest in Patent Quality

Slide 15: The Power of the Global Standards System

Slide 16: InterDigital Drives Standard Development

Slide 17: Our Technologies Benefit the Economy and the World

Slide 18: Our Approach to Sustainability

Slide 19: Accelerating Business Momentum

Slide 20: Driving Long-Term Growth

Slide 21: Clear Pathway to Growth: $1B+ ARR Target 2030

Slide 22: Agenda

Slide 23: How Innovation Drives IP

Slide 24: Research & Innovation Highlights

Slide 25: Three Areas of Foundational Research

Slide 26: Video and Media Over Wireless

Slide 27: Video Codec Evolution

Slide 28: Cellular Wireless Evolution

Slide 29: Innovation and Technology Development Strategy

Slide 30: Research Collaboration Amplifies Our Impact

Slide 31: We Lead The Industry

Slide 32: Standard Essential Patents

Slide 33: 5G and 6G Timelines

Slide 34: 6G Vision and InterDigital

Slide 35: 6G Research to Standard Example

Slide 36: Video Research to Standards Example

Slide 37: AI Research to Standards Example

Slide 38: Innovation Momentum

Slide 39: Agenda

Slide 40: Licensing Capturing Growth Opportunities

Slide 41: Business Model: A Virtuous Cycle of Innovation

Slide 42: Our Licensing Strategy Provides Stability and Growth

Slide 43: The Elements of Licensing Success

Slide 44: Driving Strong Execution

Slide 45: We Address Three Attractive Markets

Slide 46: Clear Pathway to Growth: $1B+ ARR Target 2030

Slide 47: Strong Runway for Continued Smartphone Growth

Slide 48: Smartphone Opportunity

Slide 49: Clear Pathway to Growth: $1B+ ARR Target 2030

Slide 50: CE, IoT / Auto Markets

Slide 51: Good Momentum in CE - Large Opportunity Remains

Slide 52: Strong Growth Opportunity in Cellular Automotive and IoT Licensing

Slide 53: Clear Pathway to Growth: $1B+ ARR Target 2030

Slide 54: Our Rich Video Innovation is Fueling the Media Industry

Slide 55: Our Video Codecs Enable the Content Industry

Slide 56: SVoD and AVoD Are Our Focus Verticals

Slide 57: Video Services Nearing the Size of the Smartphone Market

Slide 58: 2024 and Beyond

Slide 59: Agenda

Slide 60: Financial Overview

Slide 61: InterDigital's Attractive Financial Model

Slide 62: Innovation Drives Topline

Slide 63: Licensing Momentum Has Driven Growth In Backlog

Slide 64: Operational Discipline Drives Leverage

Slide 65: Strong Free Cash Flow Yield

Slide 66: Consistent Adjusted EBITDA Growth

Slide 67: Capital Allocation Priorities

Slide 68: Robust Return Of Capital

Slide 69: 45% Reduction In Share Count Since 2011

Slide 70: Significant Growth Potential Lies Ahead

Slide 71: Growth in Subscription Revenue with High Margins

Slide 72: IDCC has Outperformed

Slide 73: Well-Positioned To Drive Value

Slide 74: Key Takeaways

Slide 75: Agenda

Slide 76: Closing Comments

Slide 77: Closing Comments

Slide 78: Agenda

Slide 79: Please stand by Q&A will begin soon