QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Common Stock, par value $0.01 per share | |||||
Title of Class | Outstanding at October 31, 2023 |
PAGES | |||||
SEPTEMBER 30, 2023 | DECEMBER 31, 2022 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
PROPERTY AND EQUIPMENT, NET | |||||||||||
PATENTS, NET | |||||||||||
DEFERRED TAX ASSETS | |||||||||||
OTHER NON-CURRENT ASSETS, NET | |||||||||||
Total non-current assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued compensation and related expenses | |||||||||||
Deferred revenue | |||||||||||
Dividends payable | |||||||||||
Other accrued expenses | |||||||||||
Total current liabilities | |||||||||||
LONG-TERM DEBT | |||||||||||
LONG-TERM DEFERRED REVENUE | |||||||||||
OTHER LONG-TERM LIABILITIES | |||||||||||
TOTAL LIABILITIES | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
SHAREHOLDERS’ EQUITY: | |||||||||||
Preferred Stock, $ | |||||||||||
Common Stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, | |||||||||||
Total InterDigital, Inc. shareholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
REVENUES | $ | $ | $ | $ | |||||||||||||||||||
Research and portfolio development | |||||||||||||||||||||||
Licensing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Restructuring activities | |||||||||||||||||||||||
Total Operating expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
INTEREST EXPENSE | ( | ( | ( | ( | |||||||||||||||||||
OTHER INCOME (EXPENSE), NET | ( | ||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
INCOME TAX PROVISION | ( | ( | ( | ( | |||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
Net loss attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC. | $ | $ | $ | $ | |||||||||||||||||||
NET INCOME PER COMMON SHARE — BASIC | $ | $ | $ | $ | |||||||||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC | |||||||||||||||||||||||
NET INCOME PER COMMON SHARE — DILUTED | $ | $ | $ | $ | |||||||||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Unrealized gain (loss) on investments, net of tax | ( | ( | ( | ||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Comprehensive loss attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
Total comprehensive income attributable to InterDigital, Inc. | $ | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-Controlling Interest | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest distribution | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest contributions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net convertible note hedge transactions, net of tax | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net warrant transactions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-Controlling Interest | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest contributions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
For the Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Non-cash interest (income) expense, net | ( | ||||||||||
Non-cash change in fair-value | ( | ( | |||||||||
Change in deferred revenue | ( | ||||||||||
Loss on extinguishment of debt | |||||||||||
Deferred income taxes | |||||||||||
Share-based compensation | |||||||||||
Impairment of assets | |||||||||||
Other | |||||||||||
Increase in assets: | |||||||||||
Receivables | ( | ( | |||||||||
Deferred charges and other assets | ( | ( | |||||||||
Increase in liabilities: | |||||||||||
Accounts payable | |||||||||||
Accrued compensation and other expenses | |||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of short-term investments | ( | ( | |||||||||
Sales of short-term investments | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Capitalized patent costs | ( | ( | |||||||||
Long-term investments | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from issuance of convertible senior notes | |||||||||||
Purchase of convertible bond hedge | ( | ||||||||||
Proceeds from issuance of warrants | |||||||||||
Payments on long-term debt | ( | ||||||||||
Proceeds from hedge unwind | |||||||||||
Payment for warrant unwind | ( | ||||||||||
Payments of debt issuance costs | ( | ( | |||||||||
Repurchase of common stock | ( | ( | |||||||||
Net proceeds from exercise of stock options | |||||||||||
Non-controlling interest contribution | |||||||||||
Taxes withheld upon restricted stock unit vestings | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ( | |||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | |||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | $ |
Nine months ended September 30, | |||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | 2023 | 2022 | |||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid, including foreign withholding taxes | |||||||||||
Non-cash investing and financing activities: | |||||||||||
Dividend payable | |||||||||||
Accrued debt issuance costs | |||||||||||
Right-of-use assets obtained in exchange of operating lease liabilities | |||||||||||
Non-cash acquisition of patents | |||||||||||
Non-cash distribution of patents | |||||||||||
Accrued capitalized patent costs and property and equipment purchases | |||||||||||
Unsettled repurchase of common stock |
Three months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Total Increase/(Decrease) | |||||||||||||||||||||
Recurring revenues: | |||||||||||||||||||||||
Smartphone | $ | $ | $ | % | |||||||||||||||||||
CE, IoT/Auto | % | ||||||||||||||||||||||
Other | % | ||||||||||||||||||||||
Total recurring revenues | % | ||||||||||||||||||||||
Catch-up revenues a | % | ||||||||||||||||||||||
Total revenues | $ | $ | $ | % |
Nine months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Total Increase/(Decrease) | |||||||||||||||||||||
Recurring revenues: | |||||||||||||||||||||||
Smartphone | $ | $ | $ | ( | ( | % | |||||||||||||||||
CE, IoT/Auto | % | ||||||||||||||||||||||
Other | % | ||||||||||||||||||||||
Total recurring revenues | % | ||||||||||||||||||||||
Catch-up revenues a | % | ||||||||||||||||||||||
Total revenues | $ | $ | $ | % |
Revenue (a) | |||||
Remainder of 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 and Thereafter | |||||
Total Revenue | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income applicable to InterDigital, Inc. | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Dilutive effect of stock options, RSUs, convertible securities and warrants | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Dilutive effect of stock options, RSUs, convertible securities and warrants | ( | ( | ( | ( | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Restricted stock units and stock options | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
Total |
September 30, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Restricted cash included within prepaid and other current assets | |||||||||||||||||
Restricted cash included within other non-current assets | |||||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | $ |
Fair Value as of September 30, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market and demand accounts (a) | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper (b) | |||||||||||||||||||||||
U.S. government securities(c) | |||||||||||||||||||||||
Corporate bonds, asset backed and other securities (d) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fair Value as of December 31, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market and demand accounts (a) | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper (b) | |||||||||||||||||||||||
U.S. government securities(c) | |||||||||||||||||||||||
Corporate bonds, asset backed and other securities (d) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Principal Amount | Carrying Value | Fair Value | Principal Amount | Carrying Value | Fair Value | ||||||||||||||||||||||||||||||
2027 Senior Convertible Long-Term Debt | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
2024 Senior Convertible Long-Term Debt | $ | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
Technicolor Patent Acquisition Long-Term Debt | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
$ | $ | ||||||||||
Less: Deferred financing costs | ( | ( | |||||||||
Net carrying amount of the Convertible Notes | |||||||||||
Less: Current portion of long-term debt | ( | ||||||||||
Long-term net carrying amount of the Convertible Notes | $ | $ |
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
2027 Notes | 2024 Notes | Total | 2027 Notes | 2024 Notes | Total | ||||||||||||||||||||||||||||||
Contractual coupon interest | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amortization of deferred financing costs | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
2027 Notes | 2024 Notes | Total | 2027 Notes | 2024 Notes | Total | ||||||||||||||||||||||||||||||
Contractual coupon interest | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amortization of deferred financing costs | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Interest and investment income | $ | $ | $ | $ | |||||||||||||||||||
Loss on extinguishment of long-term debt | ( | ||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||
Other income (expense), net | $ | $ | $ | $ | ( |
September 30, 2023 | December 31, 2022 | ||||||||||
Tax receivables | $ | $ | |||||||||
Prepaid assets | |||||||||||
Restricted cash | |||||||||||
Patents held for sale | |||||||||||
Other current assets | |||||||||||
Total Prepaid and other current assets | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Contract asset | $ | $ | |||||||||
Tax receivables | |||||||||||
Long-term investments | |||||||||||
Goodwill | |||||||||||
Right-of-use assets | |||||||||||
Other non-current assets | |||||||||||
Total Other non-current assets, net | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Customer deposit | $ | $ | |||||||||
Accrued legal fees | |||||||||||
Other accrued expenses | |||||||||||
Total Other accrued expenses | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Operating lease liabilities | $ | $ | |||||||||
Deferred compensation liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total Other long-term liabilities | $ | $ |
Balance as of December 31, 2022 | $ | ||||
Cash payments | ( | ||||
Other | |||||
Balance as of March 31, 2023 | |||||
Cash payments | ( | ||||
Other | |||||
Balance as of June 30, 2023 | |||||
Cash payments | ( | ||||
Other | ( | ||||
Balance as of September 30, 2023 | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Asset impairment | $ | $ | $ | $ | |||||||||||||||||||
Severance and other benefits | |||||||||||||||||||||||
Outside services and other associated costs | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
Cash vs. Non-cash revenue: | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Fixed fee cash receipts (a) | $ | 368,608 | $ | 26,662 | $ | 402,683 | $ | 73,804 | |||||||||||||||
Other cash receipts (b) | 3,684 | 6,403 | 34,816 | 31,615 | |||||||||||||||||||
Change in deferred revenue | (77,474) | (274,034) | 3,933 | (146,334) | |||||||||||||||||||
Change in receivables | (167,222) | 354,242 | 16,390 | 371,930 | |||||||||||||||||||
Other (c) | 12,510 | 1,491 | (13,752) | 9,724 | |||||||||||||||||||
Total Revenue | $ | 140,106 | $ | 114,764 | $ | 444,070 | $ | 340,739 | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 310,610 | $ | (18,729) | $ | 237,318 | $ | (70,469) |
Deferred Revenue (a) | |||||
Remainder of 2023 | $ | 64,137 | |||
2024 | 134,934 | ||||
2025 | 128,791 | ||||
2026 | 78,777 | ||||
2027 | 12,450 | ||||
2028 and Thereafter | 3,617 | ||||
Total Revenue | $ | 422,706 |
September 30, 2023 | December 31, 2022 | Increase /(Decrease) | |||||||||||||||
Cash and cash equivalents | $ | 518,483 | $ | 693,479 | $ | (174,996) | |||||||||||
Restricted cash included within prepaid and other current assets | 7,229 | 9,682 | (2,453) | ||||||||||||||
Short-term investments | 565,436 | 508,298 | 57,138 | ||||||||||||||
Total cash, cash equivalents, restricted cash and short-term investments | $ | 1,091,148 | $ | 1,211,459 | $ | (120,311) |
Nine months ended September 30, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 237,318 | $ | (70,469) | $ | 307,787 |
Nine months ended September 30, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
Total Cash Receipts | $ | 437,499 | $ | 105,419 | $ | 332,080 | |||||||||||
Cash Outflows: | |||||||||||||||||
Cash operating expenses a | 159,601 | 152,032 | 7,569 | ||||||||||||||
Income taxes paid b | 30,117 | 4,585 | 25,532 | ||||||||||||||
Total cash outflows | 189,718 | 156,617 | 33,101 | ||||||||||||||
Other working capital adjustments | (10,463) | (19,271) | 8,808 | ||||||||||||||
Cash flows provided by (used in) operating activities | $ | 237,318 | $ | (70,469) | $ | 307,787 |
2027 Notes | |||||||||||||||||
Market Price Per Share | Shares Issuable Upon Conversion of the 2027 Notes | Shares Issuable Upon Exercise of the 2027 Warrant Transactions | Total If-Converted Method Incremental Shares | Shares Deliverable to InterDigital upon Settlement of the 2027 Note Hedge Transactions | Incremental Shares Issuable (a) | ||||||||||||
(Shares in thousands) | |||||||||||||||||
$80 | 186 | — | 186 | (186) | — | ||||||||||||
$85 | 524 | — | 524 | (524) | — | ||||||||||||
$90 | 825 | — | 825 | (825) | — | ||||||||||||
$95 | 1,094 | — | 1,094 | (1,094) | — | ||||||||||||
$100 | 1,336 | — | 1,336 | (1,336) | — | ||||||||||||
$105 | 1,555 | — | 1,555 | (1,555) | — | ||||||||||||
$110 | 1,754 | 196 | 1,950 | (1,754) | 196 | ||||||||||||
$115 | 1,936 | 445 | 2,381 | (1,936) | 445 | ||||||||||||
$120 | 2,103 | 674 | 2,777 | (2,103) | 674 | ||||||||||||
$125 | 2,256 | 885 | 3,141 | (2,256) | 885 |
2024 Notes | |||||||||||||||||
Market Price Per Share | Shares Issuable Upon Conversion of the 2024 Notes | Shares Issuable Upon Exercise of the 2024 Warrant Transactions | Total If-Converted Method Incremental Shares | Shares Deliverable to InterDigital upon Settlement of the 2024 Note Hedge Transactions | Incremental Shares Issuable (a) | ||||||||||||
(Shares in thousands) | |||||||||||||||||
$85 | 68 | — | 68 | (68) | — | ||||||||||||
$90 | 150 | — | 150 | (150) | — | ||||||||||||
$95 | 224 | — | 224 | (224) | — | ||||||||||||
$100 | 290 | — | 290 | (290) | — | ||||||||||||
$105 | 351 | — | 351 | (351) | — | ||||||||||||
$110 | 405 | 8 | 413 | (405) | 8 | ||||||||||||
$115 | 455 | 75 | 530 | (455) | 75 | ||||||||||||
$120 | 501 | 137 | 638 | (501) | 137 | ||||||||||||
$125 | 543 | 193 | 736 | (543) | 193 | ||||||||||||
$130 | 582 | 246 | 828 | (582) | 246 |
Three months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Increase/(Decrease) | |||||||||||||||||||||
Recurring revenues: | |||||||||||||||||||||||
Smartphone | $ | 88,376 | $ | 87,141 | $ | 1,235 | 1 | % | |||||||||||||||
CE, IoT/Auto | 15,659 | 13,905 | 1,754 | 13 | % | ||||||||||||||||||
Other | 441 | — | 441 | 100 | % | ||||||||||||||||||
Total recurring revenues | 104,476 | 101,046 | 3,430 | 3 | % | ||||||||||||||||||
Catch-up revenues a | 35,630 | 13,718 | 21,912 | 160 | % | ||||||||||||||||||
Total revenues | $ | 140,106 | $ | 114,764 | $ | 25,342 | 22 | % |
Three months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Customer A | 29% | —% | |||||||||
Customer B | 24% | 30% | |||||||||
Customer C | 14% | 17% | |||||||||
Customer D | 11% | 13% | |||||||||
Customer E | <10% | 10% |
Three months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Increase/(Decrease) | |||||||||||||||||||||
Research and portfolio development | $ | 50,253 | $ | 50,116 | $ | 137 | — | % | |||||||||||||||
Licensing | 21,522 | 18,393 | 3,129 | 17 | % | ||||||||||||||||||
General and administrative | 14,678 | 14,418 | 260 | 2 | % | ||||||||||||||||||
Total Operating expenses | $ | 86,453 | $ | 82,927 | $ | 3,526 | 4 | % |
Increase/(Decrease) | |||||
Intellectual property enforcement | $ | 2,320 | |||
Other | 1,206 | ||||
Total increase in operating expenses | $ | 3,526 |
Three months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Increase/(Decrease) | |||||||||||||||||||||
Interest expense | $ | (12,683) | $ | (7,659) | $ | (5,024) | (66) | % | |||||||||||||||
Interest and investment income | 11,763 | 4,421 | 7,342 | 166 | % | ||||||||||||||||||
Other | 2,962 | (3,509) | 6,471 | 184 | % | ||||||||||||||||||
Total non-operating income (expense), net | $ | 2,042 | $ | (6,747) | $ | 8,789 | 130 | % |
Nine months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Total Increase/(Decrease) | |||||||||||||||||||||
Recurring revenues: | |||||||||||||||||||||||
Smartphone | $ | 260,882 | $ | 262,323 | $ | (1,441) | (1) | % | |||||||||||||||
CE, IoT/Auto | 43,177 | 37,040 | 6,137 | 17 | % | ||||||||||||||||||
Other | 1,063 | 911 | 152 | 17 | % | ||||||||||||||||||
Total recurring revenues | 305,122 | 300,274 | 4,848 | 2 | % | ||||||||||||||||||
Catch-up revenues a | 138,948 | 40,465 | 98,483 | 243 | % | ||||||||||||||||||
Total revenues | $ | 444,070 | $ | 340,739 | $ | 103,331 | 30 | % |
Nine months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Customer A | 33% | —% | |||||||||
Customer B | 23% | 31% | |||||||||
Customer C | 13% | 17% | |||||||||
Customer D | 10% | 13% | |||||||||
Customer E | <10% | 10% |
Nine months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Increase/(Decrease) | |||||||||||||||||||||
Research and portfolio development | $ | 149,560 | $ | 139,470 | $ | 10,090 | 7 | % | |||||||||||||||
Licensing | 59,534 | 51,249 | 8,285 | 16 | % | ||||||||||||||||||
General and administrative | 38,686 | 34,818 | 3,868 | 11 | % | ||||||||||||||||||
Restructuring activities | — | 3,280 | (3,280) | (100) | % | ||||||||||||||||||
Total Operating expenses | $ | 247,780 | $ | 228,817 | $ | 18,963 | 8 | % |
Increase/(Decrease) | |||||
Share-based compensation | $ | 11,640 | |||
One-time net litigation fee reimbursement | 7,537 | ||||
Fair value changes of deferred compensation liability | 4,403 | ||||
Patent impairment | 2,500 | ||||
Intellectual property enforcement | (3,927) | ||||
Restructuring activities | (3,279) | ||||
Other | 89 | ||||
Total increase in operating expenses | $ | 18,963 |
Nine months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | Increase/(Decrease) | |||||||||||||||||||||
Interest expense | $ | (36,911) | $ | (19,446) | $ | (17,465) | (90) | % | |||||||||||||||
Interest and investment income | 33,697 | 4,927 | 28,770 | 584 | % | ||||||||||||||||||
Loss on extinguishment of long-term debt | — | (11,190) | 11,190 | (100) | % | ||||||||||||||||||
Other | 8,606 | (8,846) | 17,452 | 197 | % | ||||||||||||||||||
Total non-operating income (expense), net | $ | 5,392 | $ | (34,555) | $ | 39,947 | 116 | % |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs (3) | |||||||||||||||||||
July 1, 2023 - July 31, 2023 | 161,995 | $ | 95.28 | 161,995 | $ | 142,788,757 | |||||||||||||||||
August 1, 2023 - August 31, 2023 | 246,325 | $ | 84.96 | 246,325 | $ | 121,855,823 | |||||||||||||||||
September 1, 2023 - September 30, 2023 | 244,700 | $ | 82.21 | 244,700 | $ | 101,733,356 | |||||||||||||||||
Total | 653,020 | $ | 86.49 | 653,020 |
Name | Action | Date | Trading Arrangement | Maximum Shares to be Sold* | Expiration Date | ||||||||||||||||||
Title | Rule 10b5-1 | Non-Rule 10b5-1 | |||||||||||||||||||||
X | June 28, 2024 | ||||||||||||||||||||||
X | June 28, 2024 | ||||||||||||||||||||||
X | June 28, 2024 | ||||||||||||||||||||||
X | June 28, 2024 | ||||||||||||||||||||||
X | June 28, 2024 |
Exhibit Number | Exhibit Description | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1+ | ||||||||
32.2+ | ||||||||
101.INS | Inline Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline Schema Document | |||||||
101.CAL | Inline Calculation Linkbase Document | |||||||
101.DEF | Inline Definition Linkbase Document | |||||||
101.LAB | Inline Labels Linkbase Document | |||||||
101.PRE | Inline Presentation Linkbase Document | |||||||
104 | Inline Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
+ | This exhibit will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such exhibit will not be deemed to be incorporated by reference into any filing under the Securities Act or Securities Exchange Act, except to the extent that InterDigital, Inc. specifically incorporates it by reference. |
INTERDIGITAL, INC. | ||||||||
Date: November 2, 2023 | /s/ LIREN CHEN | |||||||
Liren Chen | ||||||||
President and Chief Executive Officer | ||||||||
Date: November 2, 2023 | /s/ RICHARD J. BREZSKI | |||||||
Richard J. Brezski | ||||||||
Chief Financial Officer |
Date: November 2, 2023 | /s/ Liren Chen | |||||||
Liren Chen | ||||||||
President and Chief Executive Officer |
Date: November 2, 2023 | /s/ Richard J. Brezski | |||||||
Richard J. Brezski | ||||||||
Chief Financial Officer |
Date: November 2, 2023 | /s/ Liren Chen | |||||||
Liren Chen | ||||||||
President and Chief Executive Officer |
Date: November 2, 2023 | /s/ Richard J. Brezski | |||||||
Richard J. Brezski | ||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
SHAREHOLDERS’ EQUITY: | ||
Preferred stock, par value (in USD per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 14,399,000 | 14,399,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 69,431,000 | 71,923,000 |
Common stock, shares outstanding (in shares) | 25,975,000 | 29,668,000 |
Treasury stock, shares of common held at cost (in shares) | 43,456,000 | 42,255,000 |
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
REVENUES | ||||
REVENUES | $ 140,106 | $ 114,764 | $ 444,070 | $ 340,739 |
Operating Expenses | ||||
Research and portfolio development | 50,253 | 50,116 | 149,560 | 139,470 |
Licensing | 21,522 | 18,393 | 59,534 | 51,249 |
General and administrative | 14,678 | 14,418 | 38,686 | 34,818 |
Restructuring activities | 0 | 0 | 0 | 3,280 |
Total Operating expenses | 86,453 | 82,927 | 247,780 | 228,817 |
Income from operations | 53,653 | 31,837 | 196,290 | 111,922 |
INTEREST EXPENSE | (12,683) | (7,659) | (36,911) | (19,446) |
OTHER INCOME (EXPENSE), NET | 14,725 | 912 | 42,303 | (15,109) |
Income before income taxes | 55,695 | 25,090 | 201,682 | 77,367 |
INCOME TAX PROVISION | (8,541) | (3,323) | (29,715) | (17,312) |
NET INCOME | 47,154 | 21,767 | 171,967 | 60,055 |
Net loss attributable to noncontrolling interest | (787) | (455) | (3,016) | (1,230) |
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC. | $ 47,941 | $ 22,222 | $ 174,983 | $ 61,285 |
NET INCOME PER COMMON SHARE — BASIC (in USD per share) | $ 1.82 | $ 0.75 | $ 6.42 | $ 2.03 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC (in shares) | 26,285 | 29,659 | 27,259 | 30,255 |
NET INCOME PER COMMON SHARE — DILUTED (in USD per share) | $ 1.72 | $ 0.74 | $ 6.19 | $ 2.00 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED (in shares) | 27,812 | 29,940 | 28,261 | 30,638 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 47,154 | $ 21,767 | $ 171,967 | $ 60,055 |
Unrealized gain (loss) on investments, net of tax | 30 | (292) | (1,230) | (659) |
Comprehensive income | 47,184 | 21,475 | 170,737 | 59,396 |
Comprehensive loss attributable to noncontrolling interest | (787) | (455) | (3,016) | (1,230) |
Total comprehensive income attributable to InterDigital, Inc. | $ 47,971 | $ 21,930 | $ 173,753 | $ 60,626 |
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends declared (in USD per share) | $ 0.40 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 |
Basis of Presentation |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited, condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial position of InterDigital, Inc. (individually and/or collectively with its subsidiaries referred to as “InterDigital,” the “Company,” “we,” “us” or “our,” unless otherwise indicated) as of September 30, 2023, the results of our operations for the three and nine months ended September 30, 2023 and 2022 and our cash flows for the nine months ended September 30, 2023 and 2022. The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, accordingly, do not include all of the detailed schedules, information and notes necessary to state fairly the financial condition, results of operations and cash flows in conformity with United States generally accepted accounting principles (“GAAP”). The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for year-end financial statements. Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (our “2022 Form 10-K”) as filed with the Securities and Exchange Commission (“SEC”) on February 15, 2023. Definitions of capitalized terms not defined herein appear within our 2022 Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. We have one reportable segment. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Change in Accounting Policies There have been no material changes or updates to our existing accounting policies from the disclosures included in our 2022 Form 10-K, except as indicated below in "New Accounting Guidance". Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. During 2022, the Company made reclassifications between the operating expenses lines on the consolidated income statement in order to more clearly reflect the Company’s investments to create and protect the value of our innovations. The Company grouped research and portfolio related costs within the line "Research and portfolio development", previously referred to as "Development", which resulted in reclassifying certain portfolio related costs out of the "Licensing" line, previously referred to as "Patent administration and licensing", and into "Research and portfolio development." The impact of this reclassification was $28.3 million and $83.0 million for the three and nine months ended September 30, 2022, respectively. Additionally, the previous "Selling, general, and administrative" line is now referred to as "General and administrative". Supplemental Cash Flow Information The following table presents additional supplemental cash flow information for the nine months ended September 30, 2023 and 2022 (in thousands):
New Accounting Guidance No new accounting pronouncement issued or effective during the nine months ended September 30, 2023 has or is expected to have a material impact on our condensed consolidated interim financial statements.
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Disaggregated Revenue The following table presents the disaggregation of our revenue for the three and nine months ended September 30, 2023 and 2022 (in thousands):
(a) Catch-up revenues are comprised of past patent royalties and revenues from static agreements. During the nine months ended September 30, 2023, we recognized $145.7 million of revenue that had been included in deferred revenue as of the beginning of the period. As of September 30, 2023, we had contract assets of $46.1 million and $43.7 million included within "Accounts receivable" and "Other non-current assets, net" in the condensed consolidated balance sheet, respectively. As of December 31, 2022, we had contract assets of $32.9 million and $2.5 million included within "Accounts receivable" and "Other non-current assets, net" in the condensed consolidated balance sheet, respectively. Contracted Revenue Based on contracts signed and committed as of September 30, 2023, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of such contracts (in thousands):
(a) This table includes estimated revenue related to our Samsung arbitration and Lenovo UK proceedings. In accordance with ASC 606, these estimates are limited to the amount of revenue we expect to recognize only to the extent it is probable that a subsequent change in the estimate would not result in a significant revenue reversal.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES In the nine months ended September 30, 2023 and 2022, the Company had an estimated annual effective tax rate of 14.7% and 22.4%, respectively. The change in effective tax rate is due to an increase in the amount of Foreign Derived Intangible Income deduction benefit available to the Company due to higher taxable income inclusive of timing differences between the recognition of book and tax revenue. Additionally, the effective tax rate in both periods was impacted by losses in certain jurisdictions where the Company presently has recorded a valuation allowance against the related tax benefit. Excluding this valuation allowance, our effective tax rate for the nine months ended September 30, 2023 and 2022 would have been 13.4% and 18.1%, respectively. During the nine months ended September 30, 2023, the Company recorded a discrete net benefit of $2.9 million primarily related to share-based compensation and foreign royalty withholding tax that was previously non-creditable. The prior period included a net discrete tax expense of $2.3 million primarily related to the extinguishment of long-term debt recognized during second quarter of 2022. The effective tax rate reported in any given year will continue to be influenced by a variety of factors, including timing differences between the recognition of book and tax revenue, the level of pre-tax income or loss, the foreign vs. domestic classification of the Company’s customers, and any discrete items that may occur. During the nine months ended September 30, 2023 and 2022, the Company paid approximately $8.4 million and $3.7 million, respectively, in foreign source creditable withholding tax.
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Net Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER SHARE | NET INCOME PER SHARE Basic Earnings Per Share ("EPS") is calculated by dividing net income or loss available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if options or other securities with features that could result in the issuance of common stock were exercised or converted to common stock or resulting from unvested outstanding restricted stock units ("RSUs"). The following tables reconcile the numerator and the denominator of the basic and diluted net income per share computation (in thousands, except for per share data):
Shares of common stock issuable upon the exercise or conversion of certain securities have been excluded from our computation of EPS because the strike price or conversion rate, as applicable, of such securities was greater than the average market price of our common stock and, as a result, the effect of such exercise or conversion would have been anti-dilutive. Set forth below are the securities and the weighted average number of shares of common stock underlying such securities that were excluded from our computation of EPS for the periods presented (in thousands):
Convertible Notes and Warrants Refer to Note 7, "Obligations," for information about the Company's convertible notes and warrants and related conversion and strike prices. During periods in which the average market price of the Company's common stock is above the applicable conversion price of the Company's convertible notes, or above the strike price of the Company's outstanding warrants, the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted EPS. As a result, in periods where the average market price of the Company's common stock is above the conversion price or strike price, as applicable, under the if-converted method, the Company calculates the number of shares issuable under the terms of the convertible notes and the warrants based on the average market price of the stock during the period, and includes that number in the total diluted shares outstanding for the period.
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Litigation and Legal Proceedings |
9 Months Ended |
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Sep. 30, 2023 | |
Litigation Settlement [Abstract] | |
LITIGATION AND LEGAL PROCEEDINGS | LITIGATION AND LEGAL PROCEEDINGS ARBITRATIONS AND COURT PROCEEDINGS Lenovo UK Proceedings On August 27, 2019, the Company and certain of its subsidiaries filed a claim in the UK High Court against Lenovo Group Limited and certain of its subsidiaries. The claim, as amended, alleges infringement of five of the Company’s patents relating to 3G and/or 4G/LTE standards: European Patent (UK) Nos. 2,363,008; 2,421,318; 2,485,558; 2,557,714; and 3,355,537. The Company sought, among other relief, injunctive relief to prevent further infringement of the asserted patents or, in the alternative, a determination of the terms of a FRAND license. On July 29, 2021, the UK High Court issued its decision regarding the first technical trial finding European Patent (UK) No. 2,485,558 valid, infringed, and essential to Release 8 of LTE. Lenovo appealed this decision, and on January 19, 2023, the UK Court of Appeal upheld the UK High Court’s findings that Lenovo is infringing on InterDigital’s valid and essential patent. On January 6, 2022, the UK High Court issued its decision regarding the second technical trial finding European Patent (UK) No. 3,355,537 invalid, but essential and infringed but for the finding of invalidity. The Company appealed this decision as legally erroneous, and on February 9, 2023, the UK Court of Appeal allowed the appeal, finding that Lenovo is infringing on InterDigital’s valid and essential patent. On January 31, 2023, the UK High Court issued its decision regarding the third technical trial finding European Patent (UK) No. 2,421,318 valid, essential, and infringed. On March 7, 2023, the UK High Court issued an order staying all deadlines with respect to the fourth and fifth technical trials. On March 16, 2023, the UK High Court issued its order regarding judgement in the trial to determine how much Lenovo must pay for a license to the Company’s portfolio of cellular assets, awarding the Company a lump sum of $138.7 million for such license through December 31, 2023. A form of order hearing took place in May 2023 regarding the license terms, interest, costs, and permission to appeal. On June 27, 2023, the court issued an order awarding the Company an additional $46.2 million, thus increasing the total award to $184.9 million, which was paid on July 11, 2023. The court also found that the Company should pay a portion of Lenovo’s costs and granted both parties permission to appeal on certain grounds. Both parties filed Appellant’s Notices and the appeals were docketed on July 31, 2023. On September 19, 2023, the Court of Appeal granted the Company permission to appeal on all its requested grounds. The appeal is scheduled to be heard on June 10, 2024. On September 24, 2023, Lenovo filed a new claim in the UK High Court against the Company. The claim alleges invalidity of two of the Company’s patents relating to 4G/LTE standards: European Patent (UK) Nos. 2,557,714 and 2,557,715. Lenovo sought, among other relief, a declaration that the patents at issue are invalid, not essential, and not infringed, revocation of the patents at issue, and a declaration that, upon expiration of the current license in 2023, Lenovo is licensed under terms to be determined by the UK High Court through 2028 or, in the alternative, a determination of the terms of a FRAND license. District of Delaware Patent Proceedings On August 28, 2019, the Company and certain of its subsidiaries filed a complaint in the United States District Court for the District of Delaware (the "Delaware District Court") against Lenovo Holding Company, Inc. and certain of its subsidiaries alleging that Lenovo infringes eight of the Company’s U.S. patents-U.S. Patent Nos. 8,085,665; 8,199,726; 8,427,954; 8,619,747; 8,675,612; 8,797,873; 9,203,580; and 9,456,449-by making, using, offering for sale, and/or selling Lenovo wireless devices with 3G and/or 4G LTE capabilities. As relief, InterDigital is seeking: (a) a declaration that the Company is not in breach of its relevant FRAND commitments with respect to Lenovo; (b) to the extent Lenovo does not agree to negotiate a worldwide patent license, does not agree to enter into binding international arbitration to set the terms of a FRAND license, and does not agree to be bound by the terms to be set by the UK High Court in the separately filed UK proceedings described above, an injunction prohibiting Lenovo from continued infringement; (c) damages, including enhanced damages for willful infringement and supplemental damages; and (d) attorneys’ fees and costs. On September 16, 2020, the Delaware District Court entered a schedule for the case, setting a patent jury trial. On March 8, 2021, the Delaware District Court held a claim construction hearing, and the court issued its order on May 10, 2021, construing various disputed terms. On March 24, 2021, the Delaware District Court consolidated the antitrust proceeding discussed below with this patent proceeding. On April 25, 2022, the parties filed a stipulation to stay only the claims relating to U.S. Patent No. 8,199,726. The stipulation was granted. On January 13, 2023, Lenovo filed a motion to sever and stay the Company’s patent infringement claims, requesting that its Sherman Act and breach of FRAND claims proceed to trial. On June 30, 2023, the parties submitted an update to the Court requesting that the entire case be stayed, and on July 18, 2023, the court ordered that the case be stayed pending resolution of all appeals in the UK proceedings. District of Delaware Antitrust Proceedings On April 9, 2020, Lenovo (United States) Inc. and Motorola Mobility LLC filed a complaint in the Delaware District Court against the Company and certain of its subsidiaries. The complaint alleges that the Company defendants have violated Sections 1 and 2 of the Sherman Act in connection with, among other things, their licensing of 3G and 4G standards essential patents ("SEPs"). The complaint further alleges that the Company defendants have violated their commitment to the ETSI with respect to the licensing of 3G and 4G SEPs on FRAND terms and conditions. The complaint seeks, among other things (i) rulings that the Company defendants have violated Sections 1 and 2 of the Sherman Act and are liable for breach of their ETSI FRAND commitments, (ii) a judgment that the plaintiffs are entitled to a license with respect to the Company’s 3G and 4G SEPs on FRAND terms and conditions, and (iii) injunctions against any demand for allegedly excessive royalties or enforcement of the Company defendants’ 3G and 4G U.S. SEPs against the plaintiffs or their customers via patent infringement proceedings. On June 22, 2020, the Company filed a motion to dismiss Lenovo’s Sherman Act claims with prejudice, and to dismiss Lenovo’s breach of contract claim with leave to re-file as a counterclaim in the Company’s legal proceeding against Lenovo in the Delaware District Court discussed above. On March 24, 2021, the Delaware District Court ruled on the Company’s motion to dismiss. The Delaware District Court dismissed the Sherman Act Section 1 claim without prejudice, denied the motion to dismiss the Sherman Act Section 2 claim, and consolidated the Section 2 and breach of contract claims with Company’s Delaware patent proceeding discussed above. Accordingly, these claims have been stayed pending resolution of all appeals in the UK proceedings. International Trade Commission and Companion District Court Proceedings On September 1, 2023, the Company and certain of its subsidiaries filed a complaint in the United States International Trade Commission (the "International Trade Commission") against Lenovo Group Ltd. and certain of its subsidiaries alleging that Lenovo infringes five of the Company’s U.S. patents (U.S. Patent Nos. 10,250,877, 8,674,859, 9,674,556, 9,173,054, and 8,737,933) by making, using, offering for sale, and/or selling certain electronic devices, including smartphones, computers, tablet computers, and components thereof that infringe certain claims of the asserted patents. As relief, the Company is seeking: (a) a limited exclusion order against Lenovo barring from entry into the United States all of Lenovo’s products that infringe the asserted patents; (b) cease and desist orders prohibiting Lenovo from importing, selling, offering for sale, marketing, advertising, and distributing, infringing products; and (c) a bond during the 60-day Presidential review period. On October 5, 2023, the International Trade Commission instituted the requested investigation. The hearing has been scheduled for May 8-14, 2024. The Initial Determination is expected to be issued by October 11, 2024, and the Final Determination is expected to be issued by February 11, 2025. On September 1, 2023, the Company and certain of its subsidiaries filed a complaint in the United States District Court for the Eastern District of North Carolina (the "North Carolina District Court") against Lenovo Group Ltd. and certain of its subsidiaries alleging that Lenovo infringes five of the Company’s U.S. patents (U.S. Patent Nos. 10,250,877, 8,674,859, 9,674,556, 9,173,054, and 8,737,933) by making, using, offering for sale, and/or selling Lenovo smartphones, computers (including both laptop and desktop), and tablet computers that utilize the Company’s patented technology. As relief, the Company is seeking: (a) a finding that Lenovo is liable for infringement of the asserted patents; (b) an injunction against further infringement; (c) damages, including enhanced damages for willful infringement and supplemental damages; and (d) costs. Lenovo filed its answer and counterclaims and motion to dismiss a portion of the complaint on October 10, 2023, which remains pending. China Proceedings On April 10, 2020, Lenovo (Beijing) Ltd. and certain of its affiliates filed a complaint against the Company and certain of its subsidiaries in the Beijing Intellectual Property Court (the “Beijing IP Court”) seeking a determination of the FRAND royalty rates payable for the Company’s Chinese 3G, 4G and 5G SEPs. On February 20, 2021, the Company filed an application challenging the jurisdiction of the Beijing IP Court to take up Lenovo’s complaint. On November 15, 2021, the Beijing IP Court denied the jurisdictional challenge, and the Company filed an appeal with the Supreme People’s Court of the People’s Republic of China (the “SPC”) on December 14, 2021. That appeal was denied by the SPC on September 5, 2022, and the case was sent back to the Beijing IP Court. On November 9, 2022, the Company filed a petition to stay the case. On June 12, 2023, the Beijing IP Court decided not to dismiss or stay the case at this time. On November 26, 2021, the Company was informed that Lenovo had purportedly filed an additional complaint against the Company in the Wuhan Intermediate People’s Court (the “Wuhan Court”) seeking a determination of a global FRAND royalty rate for the period from 2024 to 2029 for the Company’s 3G, 4G, and 5G SEPs. On April 16, 2022, the Company filed an application challenging, among other things, process of service and the jurisdiction of the Wuhan Court. The application was denied on August 7, 2023. The Company filed an appeal before the SPC on September 4, 2023. Germany Proceedings On March 25, 2022, March 28, 2022, and April 6, 2022, the Company and certain of its subsidiaries filed patent infringement claims in the Munich and Mannheim Regional Courts against Lenovo and certain of its affiliates, alleging infringement of European Patent Nos. 2,449,782; 2,452,498; 3,624,447 and 3,267,684 relating to HEVC standards. The Company sought, among other relief, injunctive relief to prevent further infringement of the asserted patents. On September 21, 2023, the parties entered into a patent license agreement regarding the Company’s HEVC portfolio. On October 4, 2023, the Company filed motions to withdraw the litigations involving European Patent Nos. 2,449,782; 2,452,498; 3,624,447 and 3,267,684; the litigations were withdrawn on October 9, 2023. On September 22, 2023, the Company filed a complaint with the Munich Regional Court against Lenovo and certain of its affiliates, alleging infringement of European Patent No. 2,127,420, relating to cellular 4G/LTE and/or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. Oppo, OnePlus and realme UK Proceedings On December 20, 2021, the Company filed a patent infringement claim in the UK High Court against Guangdong Oppo Mobile Telecommunications Corp., Ltd. (“Oppo”) and certain of its affiliates, OnePlus Technology (Shenzhen) Co., Ltd. (“OnePlus”) and certain of its affiliates, and realme Mobile Telecommunications (Shenzhen) Co., Ltd. (“realme”) and certain of its affiliates, alleging infringement of European Patent (UK) Nos. 2,127,420; 2,421,318; 2,485,558; and 3,355,537 relating to cellular 3G, 4G/LTE or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. On March 24, 2023, the parties agreed to stay all technical trials on the basis that European Patent No. 2,485,558 is valid and essential based on the result of Technical Trial A in the Lenovo UK proceedings. The FRAND trial to determine the royalties to be paid under the license with Oppo is scheduled to commence on February 26, 2024. India Proceedings On December 20, 2021 and December 22, 2021, the Company and certain of its subsidiaries filed patent infringement claims in the Delhi High Court in New Delhi, India against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme Mobile Telecommunication (India) Private Limited, alleging infringement of Indian Patent Nos. 262910, 295912, 313036, 320182, 319673, 242248, 299448, and 308108 relating to cellular 3G, 4G/LTE, and/or 5G, and HEVC standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. Germany Proceedings On December 20, 2021, a subsidiary of the Company filed three patent infringement claims, two in the Munich Regional Court and one in the Mannheim Regional Court, against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme and certain of its affiliates, alleging infringement of European Patent Nos. 2,485,558; 2,127,420; and 2,421,318 relating to cellular 3G, 4G/LTE and/or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. The Munich Regional Court held a hearing on December 14, 2022 regarding European Patent No. 2,421,318, with a second hearing scheduled for December 6, 2023. The Munich Regional Court held a hearing on March 2, 2023 regarding European Patent No. 2,127,420, with a second hearing scheduled for November 23, 2023. On March 10, 2023, the Munich Regional Court entered a stay of the proceedings regarding European Patent No. 2,485,558. China Proceedings On January 19, 2022, the Company was informed that Oppo had purportedly filed a complaint against the Company in the Guangzhou Intellectual Property Court (the “Guangzhou IP Court”) seeking a determination of a global FRAND royalty rate for the Company’s 3G, 4G, 5G, 802.11 and HEVC SEPs. On May 20, 2022, the Company filed an application challenging, among other things, process of service and the jurisdiction of the Guangzhou IP Court. On January 12, 2023, the Guangzhou IP Court denied the application. On February 28, 2023, the Company filed an appeal to the decision. The Supreme People’s Court denied the appeal on September 7, 2023. An initial evidentiary hearing was held on October 13, 2023. Spain Proceedings On March 1, 2022, a subsidiary of the Company filed patent infringement claims in the Barcelona Commercial Courts against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme and certain of its affiliates. The Company filed its amended complaint on April 25, 2022, alleging infringement of European Patent Nos. 3,355,537; 2,485,558; 2,421,318; and 2,557,715 relating to cellular 3G, 4G/LTE and/or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. Samsung The Company reached an agreement with Samsung Electronics Co. Ltd. (“Samsung”) to enter into binding arbitration to determine the final terms of a renewed patent license agreement to certain of the Company’s patents, which will be effective from January 1, 2023. The Company and Samsung have also agreed not to initiate certain claims against the other during the arbitration. On March 31, 2023, the Company filed a request for arbitration with the International Chamber of Commerce. On July 21, 2023, the International Chamber of Commerce confirmed the full tribunal for the arbitration. The hearing has been scheduled for Summer of 2024 with an expected resolution in late 2024. OTHER We are party to certain other disputes and legal actions in the ordinary course of business, including arbitrations and legal proceedings with licensees regarding the terms of their agreements and the negotiation thereof. We do not currently believe that these matters, even if adversely adjudicated or settled, would have a material adverse effect on our financial condition, results of operations or cash flows. None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of September 30, 2023, except as noted above.
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Cash, Concentration of Credit Risk and Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CASH, CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS | CASH, CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash currently consists of money market and demand accounts. The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of September 30, 2023, December 31, 2022 and September 30, 2022 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):
Concentration of Credit Risk and Fair Value of Financial Instruments Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash equivalents, short-term investments, and accounts receivable. We place our cash equivalents and short-term investments only in highly rated financial instruments, such as United States government instruments. Our accounts receivable and contract assets are derived principally from patent license and technology solutions agreements. Four licensees comprised 71% and 76% of our net accounts receivable balance as of September 30, 2023 and December 31, 2022, respectively. We perform ongoing credit evaluations of our licensees, who generally include large, multinational, wireless telecommunications equipment manufacturers. We believe that the book values of our financial instruments approximate their fair values. Fair Value Measurements We use various valuation techniques and assumptions when measuring the fair value of our assets and liabilities. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. This guidance established a hierarchy that prioritizes fair value measurements based on the types of input used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below: Level 1 Inputs — Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 2 Inputs — Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data, including market interest rate curves, referenced credit spreads and pre-payment rates. Level 3 Inputs — Level 3 includes financial instruments for which fair value is derived from valuation techniques including pricing models and discounted cash flow models in which one or more significant inputs are unobservable, including the Company’s own assumptions. The pricing models incorporate transaction details such as contractual terms, maturity and, in certain instances, timing and amount of future cash flows, as well as assumptions related to liquidity and credit valuation adjustments of marketplace participants. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. We use quoted market prices for similar assets to estimate the fair value of our Level 2 investments. Recurring Fair Value Measurements Our financial assets are generally included within short-term investments on our condensed consolidated balance sheets, unless otherwise indicated. Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of September 30, 2023 and December 31, 2022 (in thousands):
______________________________ (a)Primarily included within cash and cash equivalents. (b)As of September 30, 2023 and December 31, 2022, $0.0 million and $26.7 million of commercial paper was included within cash and cash equivalents, respectively. (c)As of September 30, 2023 and December 31, 2022, $0.0 million and $15.7 million of U.S. government securities was included within cash and cash equivalents, respectively. (d)As of September 30, 2023 and December 31, 2022, $8.4 million and $16.9 million of corporate bonds, asset backed and other securities was included within cash and cash equivalents, respectively. Non-Recurring Fair Value Measurements Patents During first quarter 2023, we incurred a one-time impairment of $2.5 million on our patents held for sale. We determined the fair value based upon evaluation of market conditions. During fourth quarter 2021, we renewed our multi-year, worldwide, non-exclusive patent license agreement with Sony Corporation of America ("Sony"). A portion of the consideration for the agreement was in the form of patents, which we received in March 2022. We have determined the fair value of the patents for determining the transaction price for revenue recognition purposes, which was estimated to be $30.1 million utilizing the income and market approaches. The value is amortized as a non-cash expense over the patents' estimated useful lives. Investment in Other Entities During third quarter 2023, we recognized a $6.1 million gain resulting from observable price changes of our long-term strategic investments, which was included within “Other income (expense), net” in the condensed consolidated statement of income. During second quarter 2023, we recognized a $3.1 million gain resulting from fair value changes of one of our long-term strategic investments, which was included within “Other income (expense), net” in the condensed consolidated statement of income. During second quarter 2022, we recognized a $1.6 million gain resulting from observable price changes of our long-term strategic investments, which were included within “Other income (expense), net” in the condensed consolidated statement of income. Fair Value of Long-Term Debt Convertible Notes The principal amount, carrying value and related estimated fair value of the Company's Convertible Notes reported as of September 30, 2023 and December 31, 2022 was as follows (in thousands). The aggregate fair value of the principal amount of the Convertible Notes is a Level 2 fair value measurement.
Technicolor Patent Acquisition Long-term Debt The carrying value and related estimated fair value of the Technicolor Patent Acquisition long-term debt reported as of September 30, 2023 and December 31, 2022 was as follows (in thousands). The aggregate fair value of the Technicolor Patent Acquisition long-term debt is a Level 3 fair value measurement.
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OBLIGATIONS | OBLIGATIONS 2027 Notes, and Related Note Hedge and Warrant Transactions On May 27, 2022, we issued $460.0 million in aggregate principal amount of 3.50% Senior Convertible Notes due 2027 (the "2027 Notes"). The net proceeds from the issuance of the 2027 Notes, after deducting the initial purchasers' transaction fees and offering expenses, were approximately $450.0 million. The 2027 Notes bear interest at a rate of 3.50% per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2022, and mature on June 1, 2027, unless earlier redeemed, converted or repurchased. The 2027 Notes will be convertible into cash up to the aggregate principal amount of the notes to be converted and in respect of the remainder, if any, of the Company’s obligation in excess of the aggregate principal amount of the notes being converted, pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof, at the Company’s election, at an initial conversion rate of 12.9041 shares of Common Stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $77.49 per share). The 2027 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with any of the Company’s current and any future senior unsecured indebtedness, including its 2.00% Senior Convertible Notes due 2024 (the “2024 Notes” and together with the 2027 Notes, the "Convertible Notes"). The 2027 Notes are effectively subordinated to all of the Company’s future secured indebtedness to the extent of the value of the related collateral, and the 2027 Notes are structurally subordinated to indebtedness and other liabilities, including trade payables, of the Company’s subsidiaries. On May 24 and May 25, 2022, in connection with the offering of the 2027 Notes, we entered into convertible note hedge transactions that cover, subject to customary anti-dilution adjustments, approximately 5.9 million shares of common stock, in the aggregate, at a strike price that initially corresponds to the initial conversion price of the 2027 Notes, subject to adjustment, and are exercisable upon any conversion of the 2027 Notes. Also on May 24 and May 25, 2022, we entered into privately negotiated warrant transactions, whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 5.9 million shares of common stock at an initial strike price of $106.37 per share, subject to adjustment. 2024 Notes, and Related Note Hedge and Warrant Transactions On June 3, 2019, we issued $400.0 million in aggregate principal amount of 2024 Notes. The net proceeds from the issuance of the 2024 Notes, after deducting the initial purchasers' transaction fees and offering expenses, were approximately $391.6 million. The 2024 Notes bear interest at a rate of 2.00% per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2019, and mature on June 1, 2024, unless earlier redeemed, converted or repurchased. The 2024 Notes are convertible into cash and shares of our common stock, with a specified dollar amount of $1,000 per $1,000 principal amount of 2024 Notes and any remaining amounts in shares of our common stock, at an initial conversion rate of 12.3018 shares of our common stock per $1,000 principal amount of 2024 Notes (which is equivalent to an initial conversion price of approximately $81.29 per share). The 2024 Notes are senior unsecured obligations of the Company and rank equally in right of payment with any of our current and any future senior unsecured indebtedness. The 2024 Notes are effectively subordinated to all of our future secured indebtedness to the extent of the value of the related collateral, and the 2024 Notes are structurally subordinated to indebtedness and other liabilities, including trade payables, of our subsidiaries. On May 29 and May 31, 2019, in connection with the offering of the 2024 Notes, we entered into convertible note hedge transactions (collectively, the "2024 Note Hedge Transactions") that cover, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock, in the aggregate, at a strike price that initially corresponds to the initial conversion price of the 2024 Notes, subject to adjustment, and are exercisable upon any conversion of the 2024 Notes. On May 29 and May 31, 2019, we also entered into privately negotiated warrant transactions (collectively, the "2024 Warrant Transactions" and, together with the 2024 Note Hedge Transactions, the "2024 Call Spread Transactions"), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock at an initial strike price of approximately $109.43 per share, subject to adjustment. During second quarter 2022, the Company repurchased $273.8 million in aggregate principal amount of the 2024 Notes in privately negotiated transactions concurrently with the offering of the 2027 Notes. $126.2 million in aggregate principal amount of the 2024 Notes remained outstanding as of September 30, 2023. Additionally, in connection with the partial repurchase of the 2024 Notes, the Company entered into partial unwind agreements that amend the terms of the 2024 Note Hedge Transactions to reduce the number of options corresponding to the principal amount of the repurchased 2024 Notes. The unwind agreements also reduced the number of warrants exercisable under the 2024 Warrant Transactions. Approximately 1.6 million shares of common stock in the aggregate were covered under each of the 2024 Note Hedge Transactions and the 2024 Warrant Transactions as of September 30, 2023. As of September 30, 2023, the warrants under the 2024 Warrant Transactions had a strike price of approximately $109.43 per share, as adjusted. The following table reflects the carrying value of our Convertible Notes long-term debt as of September 30, 2023 and December 31, 2022 (in thousands):
The following table presents the amount of interest cost recognized, which is included within "Interest expense" in our condensed consolidated statements of income, for the three and nine months ended September 30, 2023 and 2022 relating to the contractual interest coupon and the amortization of deferred financing costs of the Convertible Notes (in thousands):
Technicolor Patent Acquisition Long-Term Debt On July 30, 2018, we completed our acquisition of the patent licensing business of Technicolor SA ("Technicolor"), a worldwide technology leader in the media and entertainment sector (the "Technicolor Patent Acquisition"). In conjunction with the Technicolor Patent Acquisition, we assumed Technicolor’s rights and obligations under a joint licensing program with Sony relating to digital televisions and standalone computer display monitors, which commenced in 2015 and is referred to as the "Madison Arrangement." An affiliate of CPPIB Credit Investments Inc. ("CPPIB Credit"), a wholly owned subsidiary of Canada Pension Plan Investment Board, is a third-party investor in the Madison Arrangement. CPPIB Credit has made certain payments to Technicolor and Sony and has agreed to contribute cash to fund certain capital reserve obligations under the arrangement in exchange for a percentage of future revenues, specifically through September 11, 2030 in regard to the Technicolor patents. Upon our assumption of Technicolor’s rights and obligations under the Madison Arrangement, our relationship with CPPIB Credit meets the criteria in ASC 470-10-25 - Sales of Future Revenues or Various Other Measures of Income ("ASC 470"), which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, we recognized the fair value of our contingent obligation to CPPIB Credit, as of the acquisition date, as long-term debt in our condensed consolidated balance sheet. This initial fair value measurement was based on the perspective of a market participant and included significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy. The fair value of the long-term debt as of September 30, 2023 and December 31, 2022 is disclosed within Note 6, "Cash, Concentration of Credit Risk and Fair Value of Financial Instruments." Our repayment obligations are contingent upon future royalty revenues generated from the Madison Arrangement and there are no minimum or maximum payments under the arrangement. Under ASC 470, amounts recorded as debt are amortized under the interest method. At each reporting period, we will review the discounted expected future cash flows over the life of the obligation. The Company made an accounting policy election to utilize the catch-up method when there is a change in the estimated future cash flows, whereby we will adjust the carrying amount of the debt to the present value of the revised estimated future cash flows, discounted at the original effective interest rate, with a corresponding adjustment recognized as interest expense within “Interest Expense” in the condensed consolidated statements of income. The effective interest rate as of the acquisition date was approximately 14.5%. This rate represents the discount rate that equates the estimated future cash flows with the fair value of the debt as of the acquisition date and is used to compute the amount of interest to be recognized each period based on the estimated life of the future revenue streams. During the three and nine months ended September 30, 2023, we recognized $1.1 million and $2.5 million, respectively, of interest expense related to this debt, compared to $1.0 million and $2.9 million during the three and nine months ended September 30, 2022, respectively. This was included within “Interest Expense” in the condensed consolidated statements of income. Any future payments made to CPPIB Credit, or additional proceeds received from CPPIB Credit, will decrease or increase the long-term debt balance accordingly. Technicolor Contingent Consideration As part of the Technicolor Patent Acquisition, we entered into a revenue-sharing arrangement with Technicolor that created a contingent consideration liability. Under the revenue-sharing arrangement, Technicolor receives 42.5% of future cash receipts from new licensing efforts from the Madison Arrangement only, subject to certain conditions and hurdles. As of September 30, 2023, the contingent consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not reflected within the consolidated financial statements.
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Variable Interest Entities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES As further discussed below, we are the primary beneficiary of one variable interest entity. As of September 30, 2023, the book value of the assets and liabilities associated with this variable interest entity included in our condensed consolidated balance sheet were $11.4 million and $0.7 million, respectively. Assets included $2.5 million of cash and cash equivalents, $0.1 million of prepaid and other current assets, and $8.8 million of patents, net. As of December 31, 2022, the book value of the assets and liabilities associated with this variable interest entity included in our condensed consolidated balance sheet were $17.5 million and $1.8 million, respectively. Assets included $4.4 million of cash and cash equivalents, $4.0 million of accounts receivable and prepaid and other current assets, and $9.1 million of patents, net. Convida Wireless Convida Wireless was launched in 2013, and most recently renewed in 2021, to combine Sony's consumer electronics expertise with our pioneering IoT expertise to drive IoT communications and connectivity. Based on the terms of the agreement, the parties will contribute funding and resources for additional research and platform development, which we performed. Convida Wireless is a variable interest entity. Based on our provision of research and platform development services to Convida Wireless, we determined that we were the primary beneficiary for accounting purposes and consolidated Convida Wireless through September 30, 2023. For the three and nine months ended September 30, 2023, we allocated approximately $0.8 million and $3.0 million, respectively, of Convida Wireless's net loss to noncontrolling interests held by other parties and for the three and nine months ended September 30, 2022, we allocated approximately $0.5 million and $1.2 million, respectively. In October 2023, Convida Wireless appointed a President and Chief Licensing Officer who will be responsible for directing the operating activities of Convida, including research and platform development services. Accordingly, we expect to deconsolidate Convida Wireless during fourth quarter 2023.
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET The amounts included in "Other income (expense), net" in the condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
The changes in Other income (expense), net for the three and nine months ended September 30, 2023 and 2022 were $13.8 million and $57.4 million, respectively. Interest and investment income increased in both three and nine months ended September 30, 2023 and 2022, due to increased short-term investments made by the Company and market conditions driving higher yields on our short-term investments. The change in the nine months ended September 30, 2023 and 2022 was also due to the $11.2 million loss on extinguishment of the 2024 Notes in second quarter 2022, as described further in Note 7, "Obligations". The changes in Other were primarily due to foreign currency translation arising from euro translation of our foreign subsidiaries and fair value adjustments of our investments.
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Other Assets and Liabilities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS AND LIABILITIES | OTHER ASSETS AND LIABILITIES The amounts included in "Prepaid and other current assets" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
The amounts included in "Other non-current assets, net" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
The amounts included in "Other accrued expenses" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
The amounts included in "Other long-term liabilities" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
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Restructuring Activities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING ACTIVITIES | RESTRUCTURING ACTIVITIES During second quarter 2021, the Company undertook certain actions in order to increase focus on core technologies and markets. On June 10, 2021, the Company announced that, as a result of a strategic review of its research and innovation priorities, it commenced the process of a collective economic layoff in which it proposed a reduction in force of its research and innovation unit. All notices of termination have been issued to the impacted employees. During 2021, Chordant ceased operations. The Company implemented a reduction in workforce action in second quarter 2021. Additionally, in June 2021, a non-controlled subsidiary that we consolidate for financial statement purposes approved a plan to sell certain patents. The proceeds from the sale of these patents contributed to funding the non-controlled subsidiary's operations. In October 2021, we expanded our restructuring efforts to include general and administrative functions largely centered in the U.S., which resulted in a further reduction in force as well as cuts to our non-labor expenses. These employees were provided notification of termination during fourth quarter 2021. The Company does not anticipate further restructuring costs at this time, however these charges are estimated based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts incurred for such activities may differ from amounts initially estimated. As of September 30, 2023 and December 31, 2022, the Company's restructuring liability was $0.2 million and $4.5 million, respectively, and is included in "Other accrued expenses" on our condensed consolidated balance sheet. The following table presents the change in our restructuring liability during the period (in thousands):
The restructuring expenses included in "Restructuring activities" in the condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
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Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||||||
Net income attributable to InterDigital, Inc. | $ 47,941 | $ 21,783 | $ 105,259 | $ 22,222 | $ 21,069 | $ 17,994 | $ 174,983 | $ 61,285 |
Insider Trading Arrangements |
3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023
shares
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Sep. 30, 2023
shares
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Trading Arrangements, by Individual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Material Terms of Trading Arrangement | During third quarter 2023, the following Section 16 officers adopted, modified or terminated “Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K of the Exchange Act):
*Number of shares to be sold represents the individual's estimated tax liability associated with the vesting of the RSU grants covered by the trading arrangement.
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Non-Rule 10b5-1 Arrangement Adopted | false | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Terminated | false | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Rule 10b5-1 Arrangement Terminated | false | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Samir Armaly [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Samir Armaly | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Adopted | true | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption Date | August 14, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrangement Duration | 319 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Available | 1,751 | 1,751 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John Kritzmacher [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | John Kritzmacher | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Adopted | true | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption Date | August 14, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrangement Duration | 319 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Available | 756 | 756 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pierre-Yves Lesaicherre [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Pierre-Yves Lesaicherre | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Adopted | true | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption Date | August 14, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrangement Duration | 319 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Available | 972 | 972 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John Markley Jr. [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | John Markley Jr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Adopted | true | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption Date | August 14, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrangement Duration | 319 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Available | 750 | 750 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jean Rankin [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Jean Rankin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Adopted | true | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption Date | August 14, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrangement Duration | 319 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Available | 756 | 756 |
Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, accordingly, do not include all of the detailed schedules, information and notes necessary to state fairly the financial condition, results of operations and cash flows in conformity with United States generally accepted accounting principles (“GAAP”). The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for year-end financial statements. Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (our “2022 Form 10-K”) as filed with the Securities and Exchange Commission (“SEC”) on February 15, 2023. Definitions of capitalized terms not defined herein appear within our 2022 Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. We have one reportable segment. |
Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Reclassifications | Certain reclassifications have been made to prior year amounts to conform to the current year presentation. During 2022, the Company made reclassifications between the operating expenses lines on the consolidated income statement in order to more clearly reflect the Company’s investments to create and protect the value of our innovations. The Company grouped research and portfolio related costs within the line "Research and portfolio development", previously referred to as "Development", which resulted in reclassifying certain portfolio related costs out of the "Licensing" line, previously referred to as "Patent administration and licensing", and into "Research and portfolio development." The impact of this reclassification was $28.3 million and $83.0 million for the three and nine months ended September 30, 2022, respectively. Additionally, the previous "Selling, general, and administrative" line is now referred to as "General and administrative".
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New Accounting Guidance | No new accounting pronouncement issued or effective during the nine months ended September 30, 2023 has or is expected to have a material impact on our condensed consolidated interim financial statements. |
Basis of Presentation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental cash flow information | The following table presents additional supplemental cash flow information for the nine months ended September 30, 2023 and 2022 (in thousands):
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Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of revenue | The following table presents the disaggregation of our revenue for the three and nine months ended September 30, 2023 and 2022 (in thousands):
(a) Catch-up revenues are comprised of past patent royalties and revenues from static agreements.
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Schedule of contracted revenue | Based on contracts signed and committed as of September 30, 2023, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of such contracts (in thousands):
(a) This table includes estimated revenue related to our Samsung arbitration and Lenovo UK proceedings. In accordance with ASC 606, these estimates are limited to the amount of revenue we expect to recognize only to the extent it is probable that a subsequent change in the estimate would not result in a significant revenue reversal.
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Net Income Per Share (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of numerator and the denominator of the basic and diluted | The following tables reconcile the numerator and the denominator of the basic and diluted net income per share computation (in thousands, except for per share data):
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Schedule of excluded from our computation of EPS | Set forth below are the securities and the weighted average number of shares of common stock underlying such securities that were excluded from our computation of EPS for the periods presented (in thousands):
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Cash, Concentration of Credit Risk and Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash and cash equivalents | The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of September 30, 2023, December 31, 2022 and September 30, 2022 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):
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Schedule of restricted cash and cash equivalents | The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of September 30, 2023, December 31, 2022 and September 30, 2022 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):
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Schedule of fair value on a recurring basis | Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of September 30, 2023 and December 31, 2022 (in thousands):
______________________________ (a)Primarily included within cash and cash equivalents. (b)As of September 30, 2023 and December 31, 2022, $0.0 million and $26.7 million of commercial paper was included within cash and cash equivalents, respectively. (c)As of September 30, 2023 and December 31, 2022, $0.0 million and $15.7 million of U.S. government securities was included within cash and cash equivalents, respectively. (d)As of September 30, 2023 and December 31, 2022, $8.4 million and $16.9 million of corporate bonds, asset backed and other securities was included within cash and cash equivalents, respectively.
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Schedule of aggregate fair value | The aggregate fair value of the principal amount of the Convertible Notes is a Level 2 fair value measurement.
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Obligations (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying value of the 2024 Notes and 2020 Notes | The following table reflects the carrying value of our Convertible Notes long-term debt as of September 30, 2023 and December 31, 2022 (in thousands):
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Schedule of accretion of the debt discount, and the amortization of financing costs | The following table presents the amount of interest cost recognized, which is included within "Interest expense" in our condensed consolidated statements of income, for the three and nine months ended September 30, 2023 and 2022 relating to the contractual interest coupon and the amortization of deferred financing costs of the Convertible Notes (in thousands):
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Other Income (Expense), Net (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other income (expense), net | The amounts included in "Other income (expense), net" in the condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
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Other Assets and Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid and other current assets | The amounts included in "Prepaid and other current assets" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other non-current assets | The amounts included in "Other non-current assets, net" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other accrued expenses | The amounts included in "Other accrued expenses" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other long-term liabilities | The amounts included in "Other long-term liabilities" in the consolidated balance sheet as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
|
Restructuring Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring reserve by type of cost | The following table presents the change in our restructuring liability during the period (in thousands):
The restructuring expenses included in "Restructuring activities" in the condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
|
Basis of Presentation - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
segment
|
Sep. 30, 2022
USD ($)
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of reportable segments | segment | 1 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Costs and expenses | $ 86,453 | $ 82,927 | $ 247,780 | $ 228,817 |
Revision of Prior Period, Reclassification, Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Costs and expenses | $ 28,300 | $ 83,000 |
Basis of Presentation - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
Interest paid | $ 9,312 | $ 3,938 | ||
Income taxes paid, including foreign withholding taxes | 30,117 | 4,585 | ||
Non-cash investing and financing activities: | ||||
Dividends payable | 10,348 | 10,382 | $ 10,384 | |
Accrued debt issuance costs | 0 | 390 | ||
Right-of-use assets obtained in exchange of operating lease liabilities | 93 | 6,228 | ||
Non-cash acquisition of patents | $ 30,100 | 0 | 30,100 | |
Non-cash distribution of patents | 0 | 1,928 | ||
Accrued capitalized patent costs and property and equipment purchases | 334 | 3,227 | ||
Unsettled repurchase of common stock | $ 1,853 | $ 0 |
Revenue - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized that had been included in deferred revenue as of the beginning of the period | $ 145.7 | |
Contract assets, current | 46.1 | $ 32.9 |
Contract assets, non-current | $ 43.7 | $ 2.5 |
Income Taxes (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Contingency [Line Items] | ||
Effective tax rate | 14.70% | 22.40% |
Effective tax rate before valuation allowance is included (as percent) | 13.40% | 18.10% |
Discrete tax expense (benefit) | $ (2,900) | $ 2,300 |
Income taxes paid, including foreign withholding taxes | 30,117 | 4,585 |
Foreign Country | ||
Income Tax Contingency [Line Items] | ||
Income taxes paid, including foreign withholding taxes | $ 8,400 | $ 3,700 |
Net Income Per Share - Numerator and Denominator of Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||||||
Net income applicable to InterDigital, Inc. | $ 47,941 | $ 21,783 | $ 105,259 | $ 22,222 | $ 21,069 | $ 17,994 | $ 174,983 | $ 61,285 |
Weighted-average shares outstanding: | ||||||||
Basic (in shares) | 26,285 | 29,659 | 27,259 | 30,255 | ||||
Dilutive effect of stock options, RSUs, convertible securities and warrants (in shares) | 1,527 | 281 | 1,002 | 383 | ||||
Diluted (in shares) | 27,812 | 29,940 | 28,261 | 30,638 | ||||
Earnings per share: | ||||||||
Basic (in USD per share) | $ 1.82 | $ 0.75 | $ 6.42 | $ 2.03 | ||||
Dilutive effect of stock options, RSUs, convertible securities and warrants (in USD per share) | (0.10) | (0.01) | (0.23) | (0.03) | ||||
Diluted (in USD per share) | $ 1.72 | $ 0.74 | $ 6.19 | $ 2.00 |
Net Income Per Share - Antidilutive Securities Excluded from Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 7,489 | 8,025 | 7,630 | 6,589 |
Restricted stock units and stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1 | 537 | 142 | 493 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 7,488 | 7,488 | 7,488 | 6,096 |
Litigation and Legal Proceedings (Details) $ in Millions |
Jun. 27, 2023
USD ($)
|
Mar. 16, 2023
USD ($)
|
Sep. 24, 2023
claim
|
Sep. 01, 2023
patent
|
Dec. 20, 2021
patent
|
Aug. 28, 2019
patent
|
Aug. 27, 2019
patent
|
---|---|---|---|---|---|---|---|
Loss Contingencies [Line Items] | |||||||
Amount awarded | $ | $ 184.9 | $ 138.7 | |||||
Attorney fees | $ | $ 46.2 | ||||||
U.K. Proceedings | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patent infringements | 5 | ||||||
Number claims filed by counterparty | claim | 2 | ||||||
District Of Delaware Proceedings | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patent infringements | 8 | ||||||
International Trade Commission Proceedings | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patent infringements | 5 | ||||||
North Carolina District Court | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patent infringements | 5 | ||||||
German Proceedings | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patent infringements | 3 | ||||||
German Proceedings, Munich | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patent infringements | 2 | ||||||
German Proceedings, Mannheim | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patent infringements | 1 |
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Fair Value Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 518,483 | $ 693,479 | $ 539,651 | |
Restricted cash | 7,229 | 9,682 | 8,253 | |
Restricted cash included within other non-current assets | 0 | 0 | 1,081 | |
Total cash, cash equivalents and restricted cash | $ 525,712 | $ 703,161 | $ 548,985 | $ 713,224 |
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Concentration Risk [Line Items] | ||||||||
Non-cash acquisition of patents | $ 30,100 | $ 0 | $ 30,100 | |||||
Gain from observable price changes in orderly transactions of a long-term strategic investment | $ 6,100 | $ 3,100 | $ 1,600 | |||||
Patents | ||||||||
Concentration Risk [Line Items] | ||||||||
Patent impairment charges | $ 2,500 | |||||||
Accounts Receivable | Licensee Concentration Risk | Four Largest Licensees | ||||||||
Concentration Risk [Line Items] | ||||||||
Accounts receivable percentage | 71.00% | 76.00% |
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments - Fair Value of Long-Term Debt (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Technicolor Patent Acquisition Long-Term Debt | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Carrying Value | $ 33,099 | $ 30,662 |
Fair Value | 29,753 | 28,048 |
2024 Senior Convertible Long-Term Debt | Convertible Notes 2027 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Principal Amount | 460,000 | 460,000 |
Carrying Value | 452,377 | 451,062 |
Fair Value | 541,328 | 441,485 |
2024 Senior Convertible Long-Term Debt | Convertible Notes 2024 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Principal Amount | 126,174 | 126,174 |
Carrying Value | 125,774 | 125,342 |
Fair Value | $ 134,060 | $ 119,941 |
Obligations - Carrying Value of 2027 Notes and 2024 Notes (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ (125,774) | $ 0 |
LONG-TERM DEBT | 485,476 | 607,066 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Less: Deferred financing costs | (8,023) | (9,770) |
Net carrying amount of the Convertible Notes | 578,151 | 576,404 |
Current portion of long-term debt | (125,774) | 0 |
LONG-TERM DEBT | $ 452,377 | $ 576,404 |
Obligations - Accretion of Debt Discount and Amortization of Financing Costs (Details) - Convertible Debt - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Debt Instrument [Line Items] | ||||
Contractual coupon interest | $ 4,656 | $ 4,656 | ||
Amortization of deferred financing costs | 595 | 560 | ||
Total | $ 5,251 | $ 5,216 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Contractual coupon interest | $ 13,968 | $ 9,630 | ||
Amortization of deferred financing costs | 1,748 | 1,444 | ||
Total | $ 15,716 | $ 11,074 |
Obligations - Technicolor Patent Acquisition Long-Term Debt (Details) - Technicolor - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
May 31, 2019 |
|
Business Acquisition [Line Items] | |||||
Effective interest rate percentage | 14.50% | 14.50% | |||
Interest debt expense | $ 1.1 | $ 1.0 | $ 2.5 | $ 2.9 | |
Receive future cash receipts percentage | 42.50% |
Variable Interest Entities (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023
USD ($)
|
Jun. 30, 2023
USD ($)
|
Mar. 31, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
Mar. 31, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
entity
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
Variable Interest Entity [Line Items] | |||||||||
Assets | $ 1,826,481 | $ 1,826,481 | $ 1,900,105 | ||||||
Liabilities | 1,238,699 | 1,238,699 | 1,169,592 | ||||||
Cash and cash equivalents | 518,483 | $ 539,651 | 518,483 | $ 539,651 | 693,479 | ||||
Patents, net | 328,073 | 328,073 | 353,999 | ||||||
Accounts receivable | 69,572 | 69,572 | 53,182 | ||||||
Noncontrolling interests | (787) | $ (490) | $ (1,739) | $ (455) | $ (485) | $ (290) | $ (3,016) | $ (1,230) | |
Primary Beneficiary | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Number of variable interest entities | entity | 1 | ||||||||
Assets | 11,400 | $ 11,400 | 17,500 | ||||||
Liabilities | 700 | 700 | 1,800 | ||||||
Cash and cash equivalents | 2,500 | 2,500 | 4,400 | ||||||
Accounts receivable and prepaid assets | 100 | 100 | |||||||
Patents, net | $ 8,800 | $ 8,800 | 9,100 | ||||||
Accounts receivable | $ 4,000 |
Other Income (Expense), Net - Other Income, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Other Income and Expenses [Abstract] | |||||
Interest and investment income | $ 11,763 | $ 4,421 | $ 33,697 | $ 4,927 | |
Loss on extinguishment of long-term debt | 0 | 0 | $ (11,200) | 0 | (11,190) |
Other | 2,962 | (3,509) | 8,606 | (8,846) | |
Other income (expense), net | $ 14,725 | $ 912 | $ 42,303 | $ (15,109) |
Other Income (Expense), Net - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Other Income and Expenses [Abstract] | |||||
Changes in Other income (expense), net | $ 13,800 | $ 13,800 | $ 57,400 | $ 57,400 | |
Loss on extinguishment of long-term debt | $ 0 | $ 0 | $ 11,200 | $ 0 | $ 11,190 |
Other Assets and Liabilities - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Tax receivables | $ 75,934 | $ 64,117 | |
Prepaid assets | 11,474 | 9,044 | |
Restricted cash | 7,229 | 9,682 | $ 8,253 |
Patents held for sale | 0 | 4,000 | |
Other current assets | 9,561 | 2,873 | |
Total Prepaid and other current assets | $ 104,198 | $ 89,716 |
Other Assets and Liabilities - Other Non-Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Contract asset | $ 43,720 | $ 2,544 |
Tax receivables | 26,688 | 29,370 |
Long-term investments | 25,556 | 19,593 |
Goodwill | 22,421 | 22,421 |
Right-of-use assets | 16,335 | 18,034 |
Other non-current assets | 2,753 | 3,758 |
Total Other non-current assets, net | $ 137,473 | $ 95,720 |
Other Assets and Liabilities - Other accrued expenses (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Customer deposit | $ 76,100 | $ 0 |
Accrued legal fees | 11,510 | 12,230 |
Other accrued expenses | 13,575 | 11,276 |
Other accrued expenses | $ 101,185 | $ 23,506 |
Other Assets and Liabilities - Other long-term liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Operating lease liabilities | $ 17,941 | $ 19,923 |
Deferred compensation liabilities | 16,447 | 14,078 |
Other long-term liabilities | 18,297 | 19,599 |
OTHER LONG-TERM LIABILITIES | $ 52,685 | $ 53,600 |
Restructuring Activities - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Restructuring and Related Activities [Abstract] | ||||
Restructuring reserve | $ 193 | $ 1,159 | $ 3,060 | $ 4,495 |
Restructuring Activities - Restructuring Activity Included in Other Accrued Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
|
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 1,159 | $ 3,060 | $ 4,495 |
Cash payments | (956) | (1,903) | (1,487) |
Other | (10) | 2 | 52 |
Ending balance | $ 193 | $ 1,159 | $ 3,060 |
Restructuring Activities - Restructuring Activity Included in Operating Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Restructuring and Related Activities [Abstract] | ||||
Asset impairment | $ 0 | $ 0 | $ 0 | $ 2,427 |
Severance and other benefits | 0 | 0 | 0 | 305 |
Outside services and other associated costs | 0 | 0 | 0 | 548 |
Total | $ 0 | $ 0 | $ 0 | $ 3,280 |
Label | Element | Value |
---|---|---|
Convertible Notes 2024 [Member] | Convertible Debt [Member] | ||
Interest Expense, Debt | us-gaap_InterestExpenseDebt | $ 769,000 |
Interest Expense, Debt | us-gaap_InterestExpenseDebt | 778,000 |
Interest Expense, Debt | us-gaap_InterestExpenseDebt | 5,009,000 |
Interest Expense, Debt | us-gaap_InterestExpenseDebt | 2,326,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 880,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 433,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 138,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 147,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | 631,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | 4,129,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | 1,893,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | 631,000 |
Convertible Notes 2027 [Member] | Convertible Debt [Member] | ||
Interest Expense, Debt | us-gaap_InterestExpenseDebt | 6,065,000 |
Interest Expense, Debt | us-gaap_InterestExpenseDebt | 13,390,000 |
Interest Expense, Debt | us-gaap_InterestExpenseDebt | 4,447,000 |
Interest Expense, Debt | us-gaap_InterestExpenseDebt | 4,473,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 1,315,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 422,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 448,000 |
Amortization of Debt Issuance Costs | us-gaap_AmortizationOfFinancingCosts | 564,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | 5,501,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | 4,025,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | 12,075,000 |
Interest Expense, Debt, Excluding Amortization | us-gaap_InterestExpenseDebtExcludingAmortization | $ 4,025,000 |
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