Adeia Inc.

Previous wording

This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons of 2024 against 2023. A discussion regarding 2022 items and year-to-year comparisons of 2023 against 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Except as otherwise indicated, the year-to-year comparisons and results of operations discussed herein present the results of Adeia Inc. after giving effect to the Separation described herein. The following discussion of our financial condition and results of operations should be read together with the audited consolidated financial statements and notes to the consolidated financial statements included elsewhere in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed under “Risk Factors” in Part I, Item 1A above.

Current wording

This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons of 2025 against 2024. A discussion regarding 2023 items and year-to-year comparisons of 2024 against 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The following discussion of our financial condition and results of operations should be read together with the audited consolidated financial statements and notes to the consolidated financial statements included elsewhere in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed under “Risk Factors” in Part I, Item 1A above.

Previous wording

Adeia Inc. (formerly known as Xperi Holding Corporation) (“Adeia”, “we”) is a leading IP licensing platform in the consumer and entertainment space, with a diverse portfolio of media and semiconductor intellectual property and approximately 12,250 patents and patent applications worldwide. In order to serve an increasingly connected world, we invent, develop, and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment. Our inventions are key enabling technologies that drive how consumers interact with entertainment and devices at home and on the go around the world. Our foundational technologies help elevate content and improve how audiences connect with it in a way that is more intelligent, immersive and personal. Our innovative solutions help power smart devices, entertainment experiences and more, and have created a unified ecosystem that reaches highly-engaged consumers and uncovered new business opportunities.

Current wording

Adeia Inc. (formerly known as Xperi Holding Corporation) (“Adeia”, “we”) is a leading IP licensing platform in the consumer and entertainment space, with an extensive portfolio of media and semiconductor intellectual property and approximately 13,750 media and semiconductor patent assets worldwide. In order to serve an increasingly connected world, we invent, develop, and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment. Our inventions are key enabling technologies that drive how consumers interact with entertainment and devices at home and on the go around the world. Our foundational technologies help elevate content and improve how audiences connect with it in a way that is more intelligent, immersive and personal. Our innovative solutions help power smart devices, entertainment experiences and more, and have created a unified ecosystem that reaches highly-engaged consumers and uncovered new business opportunities.

Previous wording

Headquartered in Silicon Valley with more than 35 years of operating experience, we have approximately 150 employees, with substantially all of our employees located in the U.S.

Current wording

Headquartered in Silicon Valley with more than 35 years of operating experience, we have approximately 150 full-time employees, with substantially all of our employees located in the U.S.

Previous wording

Macroeconomic conditions due to inflation, geopolitical instability and global health events had in the past, and may in the future have, an adverse impact on our business. For example, such conditions may cause volatility in the markets we serve, particularly the broad consumer electronics market. Impacts from adverse macroeconomic conditions may negatively impact our financial condition and results of operations, which could result in an impairment of our long-lived assets, including goodwill, and increased credit losses.

Current wording

Macroeconomic conditions due to inflation, geopolitical instability and global health events have in the past, and may in the future have, an adverse impact on our business. For example, such conditions may cause volatility in the markets we serve, particularly the broad consumer electronics market. Impacts from adverse macroeconomic conditions may negatively impact our financial condition and results of operations, which could result in an impairment of our long-lived assets, including goodwill, and increased credit losses.

Previous wording

Although a significant portion of our revenue is derived from fixed-fee and minimum-guarantee arrangements from large, well-capitalized customers, our per-unit and variable-fee based revenue will continue to be susceptible to global health concerns, outbreaks, pandemics, armed conflict, geopolitical factors, tariffs, market volatility, labor shortages, supply chain disruptions, microchip shortages, changes in demand for semiconductors and market downturns.

Current wording

Although a significant portion of our revenue is derived from fixed-fee and minimum-guarantee arrangements from large, well-capitalized customers, our per-unit and variable-fee based revenue will continue to be susceptible to global health concerns, outbreaks, pandemics, armed conflict, geopolitical factors, trade regulations and tariffs, market volatility, labor shortages, supply chain disruptions, microchip shortages, changes in demand for semiconductors and market downturns.

Previous wording

Recurring revenues increased by $2.8 million, or 0.8% from $338.7 million in 2023 to $341.5 million in 2024.

Current wording

Recurring revenues increased by $9.8 million, or 3% from $341.5 million in 2024 to $351.3 million in 2025.

Previous wording

Non-recurring revenues decreased by $15.5 million, or 31% from $50.1 million in 2023 to $34.6 million in 2024.

Current wording

Non-recurring revenues increased by $57.4 million, or 166% from $34.6 million in 2024 to $92.0 million in 2025.

Previous wording

Cash provided by operating activities increased by $59.7 million, or 39.1%, from $152.8 million in 2023 to $212.5 million in 2024.

Current wording

Cash provided by operating activities decreased by $54.4 million, or 26%, from $212.5 million in 2024 to $158.1 million in 2025.

Previous wording

We repriced our term loan which lowered our interest rate by 61 basis points and made $114.2 million in principal payments, bringing the outstanding balance to $487.1 million as of December 31, 2024. We subsequently completed another repricing in January 2025, further reducing our interest rate by 50 basis points.

Current wording

We made $60.4 million in principal payments, bringing the outstanding balance to $426.7 million as of December 31, 2025.

Previous wording

We repurchased $20.0 million of our common stock in December 2024 following the decision of our Board of Directors to increase the total share repurchase authorization to $200.0 million in October of 2024.

Current wording

We repurchased $20.0 million of our common stock in 2025.

Previous wording

We derive the majority of our revenue from the licensing of our intellectual property (“IP”) rights to customers. For our revenue recognition policy, including descriptions of revenue-generating activities, refer to “Note 4 –Revenue” of the Notes to Consolidated Financial Statements. The following table presents our historical operating results for the periods indicated as a percentage of revenue:

Current wording

We derive the majority of our revenue from the licensing of our IP rights to customers. For our revenue recognition policy, including descriptions of revenue-generating activities, refer to “Note 4 –Revenue” of the Notes to Consolidated Financial Statements. The following table presents our historical operating results for the periods indicated as a percentage of revenue:

Previous wording

The decrease in revenue during the year ended December 31, 2024, as compared to the prior year, was primarily attributable to the execution of two long-term license agreements with Kioxia and Western Digital in the first quarter of 2023, which did not recur in 2024, and declines in royalty revenue from certain Pay-TV customers, partially offset by a multi-year license agreement with Amazon for access to our media portfolio that occurred in the fourth quarter of 2024.

Current wording

The increase in revenue during the year ended December 31, 2025, as compared to the prior year, was primarily attributable to the execution of a new long-term license agreement with Disney in the fourth quarter of 2025, partially offset by a multi-year license agreement with Amazon in the fourth quarter of 2024. A portion of revenue from both license agreements was recognized up-front in the respective period each agreement was executed.

Previous wording

Recurring revenues for the years ended December 31, 2024 and 2023 were $341.5 million and $338.7 million, respectively. The increase of $2.8 million was driven primarily by the execution of new customer agreements in 2024, and the ramp-up of recurring royalty payments under existing semiconductor agreements, partially offset by declines in royalty revenue from certain Pay-TV customers.

Current wording

Recurring revenues for the years ended December 31, 2025 and 2024 were $351.3 million and $341.5 million, respectively. The increase of $9.8 million was driven primarily by the execution of license agreements with new customers in 2024 and 2025, and increased royalty revenue from certain semiconductor customers, which were partially offset by declines in royalty revenue from certain Pay-TV customers.

Previous wording

Non-recurring revenues for the years ended December 31, 2024 and 2023 were $34.6 million and $50.1 million, respectively. The decrease of $15.5 million was primarily attributable to the execution of long-term license agreements with Kioxia and Western Digital in the first quarter of 2023 and the execution of the long-term renewal of a license agreement with Samsung in the third quarter of 2023, partially offset by a settlement agreement and multi-year renewal with X Corp. for access to our media portfolio that occurred in the second quarter of 2024 and the execution of the multi-year license agreement with Amazon in the fourth quarter of 2024.

Current wording

Non-recurring revenues for the years ended December 31, 2025 and 2024 were $92.0 million and $34.6 million, respectively. The increase of $57.4 million was primarily attributable to the execution a new long-term license agreement with Disney in the fourth quarter of 2025, partially offset by a multi-year license agreement with Amazon in the fourth quarter of 2024. A portion of revenue from both license agreements was recognized up-front in the respective period each agreement was executed.

Previous wording

Research and development expense (“R&D expense”) consists primarily of personnel costs, stock-based compensation, outside engineering consulting expenses associated with new IP development, as well as costs related to patent applications and examinations, reverse engineering, materials, supplies and an allocation of facilities costs. All R&D expense is expensed as incurred. We intend to make a continued investment in our R&D efforts because we believe they are essential to grow our patent portfolios to maintain and improve our competitiveness.

Current wording

Research and development (“R&D”) costs consist primarily of personnel costs, stock-based compensation, outside engineering consulting expenses associated with new IP development, as well as costs related to patent applications and examinations, reverse engineering, materials, supplies and an allocation of facilities costs. All R&D costs are expensed as incurred. We intend to make a continued investment in our R&D efforts because we believe they are essential to grow our patent portfolios to secure new customers and renew agreements with existing customers.

Previous wording

The increase in R&D expense during the year ended December 31, 2024, as compared to the prior year, was primarily due to an increase in personnel costs as a result of increased headcount and an increase in patent portfolio expenses, patent technical sales support expenses, partially offset by a decrease in professional services costs.

Current wording

The increase in R&D costs during the year ended December 31, 2025, as compared to the prior year, was primarily due to an increase in patent portfolio expenses, patent technical support expenses, and an increase in personnel related costs.

Previous wording

The increase in SG&A expense during the year ended December 31, 2024, as compared to the prior year, was primarily due to an increase in personnel related costs as a result of increased headcount as we scaled our business in 2024, an increase in professional services costs, an increase in certain administrative costs associated with the repricing of our credit facility in the second quarter of 2024, partially offset by decreases in separation costs that were incurred in 2023 but did not recur in 2024 since they were one-time costs, lower insurance costs and recovery of certain bad debt expenses.

Current wording

The increase in SG&A expense during the year ended December 31, 2025, as compared to the prior year, was primarily due to increases in personnel related costs and advertising expense, partially offset by decreases in outside services.

Previous wording

The decrease in amortization expense during the year ended December 31, 2024, as compared to the prior year, was primarily due to certain intangible assets becoming fully amortized during 2024. The decrease was partially offset by an increase in amortization expense as a result of patents acquired in 2024.

Current wording

The decrease in amortization expense during the year ended December 31, 2025, as compared to the prior year, was primarily due to certain intangible assets becoming fully amortized during 2024. The decrease was partially offset by the acquisition of patent portfolios and the resulting amortization of those assets.

Previous wording

The decrease in interest expense during the year ended December 31, 2024, as compared to the prior year, was primarily due to lower debt balance, the reduction of the interest rate margin resulting from the repricing of our Term Loan B during the second quarter of 2024, and the Federal Reserve interest rate cut during the third quarter of 2024.

Current wording

The decrease in interest expense during the year ended December 31, 2025, as compared to the prior year, was primarily due to lower debt balances, the reduction of the interest rate margin resulting from the repricing of our Term Loan B during the second quarter of 2024 and the first quarter of 2025, and the effects of the Federal Reserve interest rate cuts during 2024 and 2025.

Previous wording

The decrease in other income and expense, net during the year ended December 31, 2024, as compared to the prior year, was primarily due to a decrease in interest income from significant financing components from certain revenue contracts.

Current wording

The increase in other income and expense, net during the year ended December 31, 2025, as compared to the prior year, was primarily due to an increase in interest income from significant financing components from certain revenue contracts and interest income from our cash, cash equivalents and marketable securities.

Previous wording

During the year ended December 31, 2024, we recognized $0.5 million associated with the repricing of our Term Loan B and there were no such costs in 2023. Refer to discussion below for further detail on the repricing of our Term Loan B.

Current wording

During the year ended December 31, 2024, we recognized $0.5 million associated with the repricing of our Term Loan B. There were no such costs in 2025. Refer to discussion below for further detail on the repricing of our Term Loan B.

Previous wording

For the year ended December 31, 2024, we recorded an income tax expense of $16.6 million on a pretax income from continuing operations of $81.2 million, which resulted in an effective tax rate of 20.4%. The income tax expense of $16.6 million was primarily related to tax on current year income, foreign withholding tax and unrealized foreign exchange loss from prior year South Korea refund claims offset by releases of uncertain tax positions, the foreign derived intangible income deduction and foreign tax credits. The increase in income tax expense for the year ended December 31, 2024, as compared to the prior year, was attributable to tax on current year income and unrealized foreign exchange loss from prior year South Korea refund claims offset by releases of uncertain tax positions.

Current wording

For the year ended December 31, 2025, we recorded an income tax expense of $29.8 million on pretax income of $140.9 million, resulting in an effective tax rate of 21.2%. The income tax expense for the year was primarily attributable to tax on current year income, partially offset by foreign tax credits, the foreign-derived intangible income deduction, and releases of uncertain tax positions. The increase in income tax expense for the year ended December 31, 2025, as compared to the prior year, was primarily attributable to higher pretax income.

Previous wording

For the year ended December 31, 2023, we recorded an income tax expense of $12.6 million on a pretax income from continuing operations of $80.0 million, which resulted in an effective tax rate of 15.8%. The income tax expense of $12.6 million was primarily related to tax on current year income, foreign withholding tax and unrealized foreign exchange loss from prior year South Korea refund claims offset by releases of uncertain tax positions.

Current wording

For the year ended December 31, 2024, we recorded an income tax expense of $16.6 million on pretax income of $81.2 million, resulting in an effective tax rate of 20.4%. The income tax expense for the year was primarily attributable to tax on current year income, foreign withholding taxes, and unrealized foreign exchange losses related to prior year South Korea refund claims, partially offset by releases of uncertain tax positions.

Previous wording

The need for a valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more-likely-than-not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. In making such an assessment, significant weight is given to evidence that can be objectively verified. After considering both positive and negative evidence to assess the realizability of our net deferred tax assets, we determined that the positive evidence outweighed the negative evidence primarily due to cumulative income from our IP Licensing business on a continuing operations basis and the expectation of sustained profitability in future periods, and concluded that it was more-likely-than-not that we would realize our U.S. federal and certain state deferred tax assets. As a result, during the fourth quarter of 2022, we released the valuation allowance on all the federal deferred tax assets and state deferred tax assets, except for California and certain other states where tax attributes can only be utilized against the income of specific legal entities. The release of the valuation allowance resulted in $86.1 million of tax benefit in the fourth quarter of 2022. We will maintain a full valuation allowance on our foreign deferred tax asset as the expectation of future taxable income is uncertain.

Current wording

The need for a valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more-likely-than-not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. In making such an assessment, significant weight is given to evidence that can be objectively verified. Given our history of sustained profitability, we concluded that it was more-likely-than-not that we would realize our U.S. federal and certain state deferred tax assets. We continue to maintain a valuation allowance against tax attributes in California and other state tax attributes that can only be utilized against the income of specific legal entities.

Previous wording

Our primary sources of liquidity and capital resources are our operating cash flows and our short-term investments in marketable securities. Cash, cash equivalents and marketable securities were $110.4 million at December 31, 2024, an increase of $26.8 million from $83.6 million at December 31, 2023. This increase resulted primarily from $212.5 million of cash generated from operations and $3.2 million in proceeds from our employee stock purchase program and exercise of stock options, partially offset by $114.2 million in repayment of long-term debt, $22.3 million in purchases of long-lived assets, $21.8 million in dividends paid, $20.0 million in repurchases of common stock ($1.3 million in repurchases of common stock were pending settlement as of December 31, 2024), and $12.8 million in repurchases of common stock for tax withholdings on equity awards.

Current wording

Our primary sources of liquidity and capital resources are our operating cash flows and our short-term investments in marketable securities. Cash, cash equivalents and marketable securities were $136.7 million at December 31, 2025, an increase of $26.3 million from $110.4 million at December 31, 2024. This increase resulted primarily from $158.1 million of cash generated from operations and $2.4 million in proceeds from our employee stock purchase program and exercise of stock options, partially offset by $60.4 million in repayment of long-term debt, $8.8 million in purchases of long-lived assets, $21.8 million in dividends paid, $20.0 million in repurchases of common stock ($1.3 million in repurchases of common stock executed during the year ended December 31, 2024 were settled in January 2025), and $22.5 million in repurchases of common stock for tax withholdings on equity awards.

Previous wording

As of December 31, 2024, we had outstanding long-term debt in an aggregate principal amount of $487.1 million, with a minimum of $28.1 million payable within 12 months. For the year ended December 31, 2023, we were required to make $29.1 million in payments based on the consolidated excess cash flow clause within the debt agreement. The excess cash flow payment was classified as current portion of long-term debt in the Consolidated Balance Sheet as of December 31, 2023. Based on certain leverage ratios and the voluntary prepayments we made during the year ended December 31, 2024, no excess cash flow payment is required in 2025.

Current wording

As of December 31, 2025, we had outstanding long-term debt in an aggregate principal amount of $426.7 million, with a minimum of $24.4 million payable within the next 12 months. Based on achieving certain leverage ratios and as a result of voluntary prepayments, we were not required to make excess cash flow payments as pursuant to the agreement for either of the years ended December 31, 2024 and 2025.

Previous wording

Future interest payments associated with the debt, based on current interest rates, total $117.2 million, with $36.7 million payable within 12 months. The interest payments may vary with changes in interest rates, as well as due to reductions of the principal amount. Refer to “Note 11 –Debt” of the Notes to Consolidated Financial Statements for additional information on debt obligations and maturities.

Current wording

Future interest payments associated with the debt, based on current interest rates, total $63.4 million, with $27.2 million payable within 12 months. The interest payments may vary with changes in interest rates, as well as due to reductions of the principal amount. Refer to “Note 10 –Debt” of the Notes to Consolidated Financial Statements for additional information on debt obligations and maturities.

Previous wording

We have lease arrangements for office and research facilities, data centers and office equipment. As of December 31, 2024, fixed lease payment obligations amounted to $10.0 million, with $0.3 million payable within 12 months. Refer to “Note 8 –Leases” of the Notes to Consolidated Financial Statements for additional information on lease obligations and maturities.

Current wording

We have lease arrangements for office and research facilities, data centers and office equipment. As of December 31, 2025, fixed lease payment obligations amounted to $9.3 million, with $0.7 million payable within 12 months. Refer to “Note 8 –Leases” of the Notes to Consolidated Financial Statements for additional information on lease obligations and maturities.

Previous wording

Prior to the Separation, we and a subsidiary of Xperi Inc. (“Xperi Sub”) entered into an agreement (the “Specified Agreement”) with a third party pursuant to which we guarantee the performance of Xperi Sub under the Specified Agreement, including its payment obligations to such third party. In connection with the Separation, we and Xperi Sub entered into a separate cross business agreement (the “Cross Business Agreement”) effective as of October 1, 2022 under which we agreed to make guarantee payments to Xperi Sub in amounts based on certain of its operating expenses and other minimum performance obligations under the Specified Agreement through 2031. Consequently, on October 1, 2022, we recognized a guarantee liability of $19.7 million which represents the fair value of our projected payments of such operating expenses during the term of the Cross Business Agreement. Subsequent changes to the carrying value of the guarantee are recognized as part of our results of operations. As of December 31, 2024, the balance of the guarantee liability is $17.1 million, including a current portion of $2.5 million.

Current wording

Prior to the Separation, we and a subsidiary of Xperi Inc. (“Xperi Sub”) entered into an agreement (the “Specified Agreement”) with a third party pursuant to which we guarantee the performance of Xperi Sub under the Specified Agreement, including its payment obligations to such third party. In connection with the Separation, we and Xperi Sub entered into a separate cross business agreement (the “Cross Business Agreement”) effective as of October 1, 2022 under which we agreed to make guarantee payments to Xperi Sub in amounts based on certain of its operating expenses and other minimum performance obligations under the Specified Agreement through 2031. Consequently, on October 1, 2022, we recognized a guarantee liability of $19.7 million, which represents the fair value of Adeia Media’s projected payments of such operating expenses during the term of the Cross Business Agreement. Subsequent changes to the carrying value of the guarantee are recognized as part of our results of operations. As of December 31, 2025, the balance of the guarantee liability is $16.3 million, including a current portion of $0.8 million. Operating expense reimbursements are capped at a maximum of $7.5 million per annum. To date, such reimbursements have not been material.

Previous wording

Our other purchase obligations primarily consist of non-cancelable obligations related to advertising, engineering services and internet and telecommunications services. As of December 31, 2024, we had purchase obligations of $5.1 million, including $2.9 million due in 2025, $1.1 million due in 2026, and $1.1 million due thereafter. These purchase obligations represent commitments under enforceable and legally binding agreements and do not represent the entire anticipated purchases in the future. Refer to “Note 16 –Commitments and Contingencies” of the Notes to Consolidated Financial Statements for additional detail.

Current wording

Our other purchase obligations primarily consist of non-cancelable obligations related to advertising, engineering services and internet and telecommunications services. As of December 31, 2025, we had purchase obligations of $7.5 million, including $3.2 million due in 2026, $2.4 million due in 2027, and $1.9 million due thereafter. These purchase obligations represent commitments under enforceable and legally binding agreements and do not represent the entire anticipated purchases in the future. Refer to “Note 15 –Commitments and Contingencies” of the Notes to Consolidated Financial Statements for additional detail.

Previous wording

As of December 31, 2024, we had accrued $84.6 million of unrecognized tax benefits in long-term income taxes payable related to uncertain tax positions, which includes an immaterial amount of accrued interest and penalties. At this time, we are unable to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time. If we are successful in receiving our South Korean withholding tax refunds of $112.4 million, including interest and foreign exchange, then $64.6 million of unrecognized tax benefit would be payable to the U.S. tax authorities.

Current wording

As of December 31, 2025, we had accrued $7.3 million of unrecognized tax benefits in long-term income taxes payable related to uncertain tax positions, which include an immaterial amount of accrued interest and penalties. At this time, we are unable to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time.

Previous wording

In 2024 and 2023, we paid quarterly dividends of $0.05 per share in each of the March, June, September and December quarterly periods. Our capacity to pay dividends in the future depends on many factors, including our financial condition, results of operations, capital requirements, capital structure, industry practice and other business conditions that the Board of Directors considers relevant. We anticipate that all quarterly dividends will be paid out of cash, cash equivalents and short-term investments in marketable securities.

Current wording

In 2025 and 2024, we paid quarterly dividends of $0.05 per share in each of the March, June, September and December quarterly periods. Our capacity to pay dividends in the future depends on many factors, including our financial condition, results of operations, capital requirements, capital structure, industry practice and other business conditions that the Board of Directors considers relevant. We anticipate that any quarterly dividends if and when paid, will be paid out of cash, cash equivalents and short-term investments in marketable securities.

Previous wording

On June 12, 2020, our Board of Directors terminated a prior stock repurchase program and approved a new stock repurchase plan (the “Plan”), which provides for the repurchase of up to $150.0 million of our common stock dependent on market conditions, share price and other factors. No expiration has been specified for this Plan. On April 22, 2021, our Board of Directors authorized an additional $100.0 million of purchases under the Plan, under which $172.2 million was utilized for stock repurchases, leaving the total authorized amount available for repurchase under the Plan at $77.8 million. In October 2024, our Board of Directors approved an increase of the existing share repurchase authorization up to a total of $200.0 million. The stock repurchases may be made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions, or pursuant to a Rule 10b5-1 plan. Since the inception of the Plan, and through December 31, 2024, we have repurchased an aggregate of approximately 11.4 million shares of common stock at a total cost of $192.2 million at an average price of $16.83. As of December 31, 2024, the total remaining amount available for repurchase under the Plan was $180.0 million.

Current wording

In October 2024, our Board of Directors approved an increase to the existing share repurchase authorization up to a total of $200.0 million. The stock repurchases may be made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions, or pursuant to a Rule 10b5-1 plan. During the year ended December 31, 2025, we repurchased a total of approximately 1.5 million shares of common stock, at an average price of $13.55 per share for a total cost of $20.0 million. During the year ended December 31, 2024, we repurchased a total of approximately 1.4 million shares of common stock, at an average price of $13.95 per share for a total cost of $20.0 million. As of December 31, 2025, the total remaining amount available for repurchase under this plan was $160.0 million.

Previous wording

We may continue to execute authorized repurchases from time to time under the Plan. The amount and timing of any repurchases under the Plan depend on a number of factors, including, but not limited to, the trading price, volume and availability of our common shares. There is no guarantee that such repurchases under the Plan will enhance the value of our common stock.

Current wording

We may continue to execute authorized repurchases from time to time under our existing stock repurchase plan. The amount and timing of any repurchases under the stock repurchase plan depend on a number of factors, including, but not limited to, the trading price, volume and availability of our common shares. There is no guarantee that such repurchases under the stock repurchase plan will enhance the value of our common stock.

Previous wording

Cash flows provided by operations were $152.8 million for the year ended December 31, 2023, primarily due to our net income of $67.4 million being adjusted for non-cash items of depreciation of $1.5 million, amortization of intangible assets of $93.7 million, stock-based compensation expense of $18.1 million, deferred income tax of $11.4 million, amortization of debt issuance costs of $4.3 million and $(43.4) million net change in operating assets and liabilities.

Current wording

Cash flows provided by operations were $158.1 million for the year ended December 31, 2025, primarily due to our net income of $111.1 million being adjusted for non-cash items of amortization of intangible assets of $56.6 million, stock-based compensation expense of $34.7 million, amortization of debt issuance costs of $3.4 million, depreciation of $2.0 million, and change in deferred income tax and other of $33.7 million, partially offset by $(82.8) million net change in operating assets and liabilities.

Previous wording

Net cash used in investing activities was $34.5 million for the year ended December 31, 2023, primarily related to purchases of short-term investments in marketable securities of $42.8 million, and purchases of long-lived assets of $6.3 million, partially offset by maturities of marketable securities of $14.7 million.

Current wording

Net cash used in investing activities was $40.3 million for the year ended December 31, 2025, primarily related to purchases of short-term investments in marketable securities of $57.3 million, and purchases of long-lived assets of $8.8 million, partially offset by maturities of marketable securities of $24.3 million and proceeds from sales of short-term investments of $1.5 million.

Previous wording

Our capital expenditures for property and equipment consist primarily of leasehold improvements, purchases of computer hardware and software, information systems, and production and test equipment. During the years ended December 31, 2024 and 2023, we spent $1.8 million and $3.8 million on capital expenditures, respectively. We expect capital expenditures in 2025 to be approximately $2.0 million. Our capital expenditures for intangible assets consists primarily of acquired patents. During the years ended December 31, 2024 and 2023, we spent $20.5 million and $2.5 million on purchases of intangible assets, respectively. These expenditures are expected to be financed with cash from operations, existing cash and cash equivalents and short-term investments. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.

Current wording

Our capital expenditures for property and equipment consist primarily of leasehold improvements, purchases of computer hardware and software, information systems, and production and test equipment. During each of the years ended December 31, 2025 and 2024, we spent $1.8 million on capital expenditures. Our capital expenditures for intangible assets consists primarily of acquired patents. During the years ended December 31, 2025 and 2024, we spent $7.0 million and $20.5 million on purchases of intangible assets, respectively. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.

Previous wording

Net cash used in financing activities was $178.3 million for the year ended December 31, 2023 principally due to $148.0 million in repayment of indebtedness, $21.3 million in dividends paid, and $11.3 million in repurchases of common stock for tax withholdings on equity awards, partially offset by $2.4 million in proceeds from the issuance of common stock under our employee stock grant programs and employee stock purchase plans.

Current wording

Net cash used in financing activities was $123.5 million for the year ended December 31, 2025 principally due to $60.4 million in repayment of indebtedness, $21.8 million in dividends paid, $20.0 million in repurchases of common stock ($1.3 million in repurchases of common stock were pending settlement as of December 31, 2024), and $22.5 million in repurchases of common stock for tax withholdings on equity awards, partially offset by $2.4 million in proceeds from our employee stock purchase program and exercise of stock options.

Previous wording

On May 20, 2024, we entered into Amendment No. 3 (“Amendment No. 3”) to the 2020 Credit Agreement, which provided for, among other things, (i) a repricing of the 2020 Term Loan B Facility through a refinancing of the entire amount of the 2021 Refinanced Term Loan B with a new tranche of term loans (the “2024 Term Loan B”) in an aggregate principal amount of $561.1 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of SOFR loans, SOFR plus a margin of 3.00% per annum and (y) in the case of base rate loans, 2.00% per annum, (iii) a reduction in the excess cash flow mandatory payment thresholds and (iv) a prepayment premium of 1.00% in connection with any repricing transaction with respect to the 2024 Term Loan B within six months of the closing date of Amendment No. 3. The 2024 Term Loan B will mature on June 8, 2028, the same date upon which the 2021 Refinanced Term Loan B matured prior to giving effect to Amendment No. 3.

Current wording

On May 20 2024, we entered into Amendment No. 3 (“Amendment No. 3”) to the 2020 Credit Agreement, which provided for a repricing of the entire outstanding aggregate principal amount of $561.1 million. Amendment No. 3 also reduced interest margins (50 basis points) from SOFR plus a margin of 3.50% to SOFR plus a margin of 3.00% per annum or base rate plus a margin of 2.00% per annum. In addition, Amendment No. 3 lowered the excess cash flow mandatory payment thresholds and credit spread adjustment provision.

Previous wording

At December 31, 2024, $487.1 million was outstanding under the term loan B facility with an interest rate, including unamortized debt discount and issuance costs of $11.6 million. Interest is payable monthly. Under the existing loan agreement, we have future minimum principal payments for $28.1 million each year from 2025 through 2027, with the remaining principal balance of $402.9 million due in 2028. After the Separation, we own the debt under the term loan B facility. Additionally, we paid $29.1 million during the year ended December 31, 2024, based on certain leverage ratios and our excess cash flow generated for the year ended December 31, 2023. The 2020 Credit Agreement, as amended, also requires that we continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year. The cash payments are applied to the remaining principal balance due at final maturity. Based on certain leverage ratios and the voluntary prepayments we made during the year ended December 31, 2024, no excess cash flow payment is required in 2025. The term loan B facility contains customary covenants, and as of December 31, 2024, we were in full compliance with such covenants.

Current wording

Under the existing loan agreement, we have future minimum principal payments for our debt of $24.4 million each year from 2026 through 2027, with the remaining principal balance of $378.0 million will be due June 8, 2028. The 2020 Credit Agreement, as amended, also requires that we continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year. The cash payments are applied to the remaining principal balance due at final maturity. Based on certain leverage ratios and the voluntary prepayments the Company made during the year ended December 31, 2024, no excess cash flow payments were required for the years ended December 31, 2025 and 2024. The term loan B facility contains customary covenants, and as of December 31, 2025, we were in full compliance with such covenants.