Adeia Inc.

Previous wording

Adeia Inc. (formerly known as Xperi Holding Corporation) (“Adeia”, “we”) is a technology company and an innovation incubator. We have spent decades investing in advanced research and development to create market-leading technologies for the entertainment, media, consumer electronics, and semiconductor industries. Our innovative solutions support practically every aspect of consumers’ day-to-day interaction with media, consumer electronics and entertainment, enabling our customers to build customized, next-generation solutions for users around the globe. We believe our commitment to and investment in innovation has resulted in a leading IP licensing platform in these industries, with an extensive portfolio of media and semiconductor IP and approximately 13,750 media and semiconductor patent assets worldwide. In order to serve an increasingly connected world, we invent, develop, acquire and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment and technology across a variety of platforms.

Current wording

Adeia Inc. (formerly known as Xperi Holding Corporation) (“Adeia”, “we”) is a technology company and an innovation incubator. We have spent decades investing in advanced research and development to create market-leading technologies for the entertainment, media, consumer electronics, e-commerce and semiconductor industries. Our innovative solutions support practically every aspect of consumers’ day-to-day interaction with media, consumer electronics and entertainment, enabling our customers to build customized, next-generation solutions for users around the globe. We believe our commitment to and investment in innovation has resulted in a leading IP licensing platform in these industries, with an extensive portfolio of media and semiconductor IP and over 14,250 media and semiconductor patent assets worldwide. In order to serve an increasingly connected world, we invent, develop, acquire and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment and technology across a variety of platforms.

Previous wording

We operate and report in one segment: IP Licensing. We believe that this structure reflects our current operational and financial management and provides the best structure for us to focus on growth opportunities. Our Chief Executive Officer has been determined to be the Chief Operating Decision Maker (“CODM”) in consideration with the authoritative guidance on segment reporting.

Current wording

We operate and report in one segment: IP Licensing. We believe that this structure reflects our current operational and financial management and provides the best structure for us to focus on growth opportunities. Our Chief Executive Officer has been determined to be the Chief Operating Decision Maker (“CODM”) in accordance with the authoritative guidance on segment reporting.

Previous wording

In evaluating our financial condition and operating performance, we primarily focus on revenue and cash flows from operations. For the three months ended March 31, 2026, as compared to the same period in 2025:

Current wording

In evaluating our financial condition and operating performance, we primarily focus on revenue and cash flows from operations. For the three and six months ended June 30, 2026, as compared to the same periods in 2025:

Previous wording

Recurring revenues decreased by $18.1 million, or 21.4% from $84.4 million in 2025 to $66.3 million in 2026.

Current wording

Recurring revenues decreased by $11.6 million, or 13.6% from $85.1 million in 2025 to $73.5 million in 2026.

Previous wording

Non-recurring revenues increased by $35.2 million, or 1067.0% from $3.3 million in 2025 to $38.5 million in 2026.

Current wording

Non-recurring revenues increased by $22.0 million, or 3441.2% from $0.6 million in 2025 to $22.6 million in 2026.

Previous wording

Cash provided by operating activities increased by $1.4 million, or 2.5% from $57.1 million in 2025 to $58.5 million in 2026.

Current wording

Cash provided by operating activities increased by $31.5 million, or 136.3% from $23.1 million in 2025 to $54.6 million in 2026.

Previous wording

We made $28.1 million in principal payments towards our term loan, bringing the outstanding balance to $398.6 million as of March 31, 2026.

Current wording

We made $6.1 million in principal payments towards our term loan, bringing the outstanding balance to $392.6 million as of June 30, 2026.

Previous wording

We repurchased $10.0 million of our common stock in 2026.

Current wording

We repurchased $10.0 million of our common stock during the three months ended June 30, 2026.

Previous wording

The following table sets forth our revenue for the three months ended March 31, 2026 and 2025 (in thousands, except for percentages):

Current wording

The following table sets forth our revenue for the three and six months ended June 30, 2026 and 2025 (in thousands, except for percentages):

Previous wording

The increase in revenue during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily attributable to the execution of two new multi-year license agreements with AMD and Microsoft in 2026; partially offset by declines in royalty revenue from certain Pay-TV customers.

Current wording

The increase in revenue during the three and six months ended June 30, 2026, as compared to the same periods in 2025, was primarily attributable to the execution of new multi-year license agreements in 2026; partially offset by declines in royalty revenue from certain Pay-TV customers.

Previous wording

Recurring revenue for the three months ended March 31, 2026 and 2025 were $66.3 million and $84.4 million, respectively. The decrease of $18.1 million was driven primarily by declines in royalty revenue from certain Pay-TV customers; partially offset by the execution of license agreements with new customers from April 1, 2025 to March 31, 2026.

Current wording

Recurring revenue for the three months ended June 30, 2026 and 2025 were $73.5 million and $85.1 million, respectively. The decrease of $11.6 million was driven primarily by declines in royalty revenue from certain Pay-TV customers; partially offset by the execution of license agreements with new customers after the second quarter of 2025.

Previous 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 maintain and improve our competitiveness.

Current wording

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 maintain and improve our competitiveness.

Previous wording

The increase in R&D costs during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in patent portfolio expenses and an increase in personnel related costs as a result of increased headcount.

Current wording

The increase in R&D costs during the three and six months ended June 30, 2026, as compared to the same periods in 2025, was primarily due to an increase in patent portfolio expenses and an increase in personnel related costs as a result of increased headcount.

Previous wording

The increase in SG&A expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in personnel related costs as a result of increased headcount and an increase in advertising expense, partially offset by lower outside services.

Current wording

The decrease in SG&A expense during the three months ended June 30, 2026, as compared to the same period in 2025, was primarily due to a decrease in advertising expense, partially offset by an increase in personnel related costs as a result of increased headcount. SG&A expense during the six months ended June 30, 2026, as compared to the same period in 2025, was relatively consistent.

Previous wording

The increase in amortization expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to patents acquired in 2025, partially offset by certain intangible assets becoming fully amortized during 2025.

Current wording

The increase in amortization expense during the three and six months ended June 30, 2026, as compared to the same periods in 2025, was primarily due to patents acquired in 2025 and 2026, partially offset by certain intangible assets becoming fully amortized during 2025.

Previous wording

Our litigation expense for the three months ended March 31, 2026, was relatively consistent with the same period in 2025. Higher expenses driven by increased activity in certain matters that have settled were offset by expenses associated with new litigation matters. See Part II, Item 1 –Legal Proceedings for additional information regarding these matters.

Current wording

The decrease in litigation expense for the three and six months ended June 30, 2026, as compared to the same periods in 2025, was primarily due to decreased expense associated with certain matters that have settled, partially offset by expenses associated with new litigation matters. See Part II, Item 1 –Legal Proceedings for additional information regarding these matters.

Previous wording

The decrease in interest expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to lower debt balance and lower variable interest rates.

Current wording

The decrease in interest expense during the three and six months ended June 30, 2026, as compared to the same periods in 2025, was primarily due to lower debt balance and lower variable interest rates.

Previous wording

Other income and expense, net during the three months ended March 31, 2026, as compared to the same period in 2025, was relatively consistent.

Current wording

Other income and expense, net during the three and six months ended June 30, 2026, as compared to the same periods in 2025, was relatively consistent.

Previous wording

Our income tax provision for interim periods is based on the estimated annual effective tax rate adjusted for discrete items during the period. For the three months ended March 31, 2026, we recorded income tax expense of $5.2 million on pretax income of $28.0 million, which resulted in an effective tax rate of 18.6%. The effective tax rate varies from the 21% U.S. federal tax rate primarily due to excess tax benefits related to stock-based compensation.

Current wording

Our income tax provision for interim periods is based on the estimated annual effective tax rate adjusted for discrete items during the period. For the three months ended June 30, 2026, we recorded income tax expense of $1.6 million on pretax income of $19.0 million, and for the six months ended June 30, 2026, we recorded income tax expense of $6.8 million on pretax income of $47.0 million, which resulted in an effective tax rates of 8.6% and 14.6%, respectively, for the three and six months ended June 30, 2026. The effective tax rate varies from the 21% U.S. federal tax rate primarily due to tax benefits related to stock-based compensation.

Previous wording

The increase in income tax expense for the three months ended March 31, 2026, as compared to the same period in the prior year was primarily due to an increase to pretax income.

Current wording

The increase in income tax expense for the three and six months ended June 30, 2026, as compared to the same period in the prior year was primarily due to an increase to pretax income.

Previous wording

The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents as of and for the three months ended March 31, 2026 and 2025:

Current wording

The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents as of and for the six months ended June 30, 2026 and 2025:

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 $115.8 million at March 31, 2026, a decrease of $21.0 million from $136.7 million at December 31, 2025. This decrease primarily resulted from $58.5 million of cash generated from operations, partially offset by $28.1 million in repayment of our long-term debt, $29.8 million in repurchases of common stock associated with tax withholdings on equity awards, $10.0 million in repurchases of common stock, $5.5 million in dividends paid, and $5.5 million in purchases of intangible assets.

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 $137.1 million and $136.7 million at June 30, 2026 and December 31, 2025, respectively. The change in cash, cash equivalents and marketable securities in the six months ended June 30, 2026 included $113.1 million of cash generated from operations, partially offset by $34.2 million in repayment of our long-term debt, $32.9 million in repurchases of common stock associated with tax withholdings on equity awards, $20.0 million in repurchases of common stock, $11.0 million in dividends paid, and $15.0 million in purchases of intangible assets.

Previous wording

Report on Form 10-K for the year ended December 31, 2025. Other than the principal payments of $28.1 million made by us under the existing Term Loan B during the three months ended March 31, 2026, our cash requirements have not materially changed since December 31, 2025. We expect to continue to make additional payments on our existing debt from cash generated from operations.

Current wording

For information about our material cash requirements, see “Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. Other than the principal payments of $34.2 million made by us under the existing Term Loan B during the six months ended June 30, 2026, our cash requirements have not materially changed since December 31, 2025. We expect to continue to make additional payments on our existing debt from cash generated from operations.

Previous 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 three months ended March 31, 2026, we repurchased a total of approximately 0.4 million shares of common stock, at an average price of $22.45 per share for a total cost of $10.0 million. During the three months ended March 31, 2025, we repurchased a total of approximately 0.8 million shares of common stock, at an average price of $13.19 per share for a total cost of $10.0 million. As of March 31, 2026, the total remaining amount available for repurchase under this plan was $150.0 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 three months ended June 30, 2026, we repurchased a total of approximately 0.4 million shares of common stock, at an average price of $28.36 per share for a total cost of $10.0 million. During the six months ended June 30, 2026, we repurchased a total of approximately 0.8 million shares of common stock, at an average price of $25.06 per share for a total cost of $20.0 million. During the six months ended June 30, 2025, we repurchased a total of approximately 0.8 million shares of common stock, at an average price of $13.19 per share for a total cost of $10.0 million. These purchases occurred during the three months ended March 31, 2025 and no repurchases were made during the three months ended June 30, 2025. As of June 30, 2026, the total remaining amount available for repurchase under this plan was $140.0 million.

Previous wording

Cash flows provided by operations were $58.5 million for the three months ended March 31, 2026, primarily due to our net income of $22.8 million being adjusted for non-cash items of amortization of intangible assets of $15.9 million, stock-based compensation expense of $8.8 million, and $11.8 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2025.

Current wording

Cash flows provided by operations were $113.1 million for the six months ended June 30, 2026, primarily due to our net income of $40.1 million being adjusted for noncash items of amortization of intangible assets of $32.0 million, stock-based compensation expense of $19.2 million, and $21.9 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2025.

Previous wording

Cash flows provided by operations were $57.1 million for the three months ended March 31, 2025, primarily due to our net income of $11.8 million being adjusted for non-cash items of amortization of intangible assets of $14.1 million, stock-based compensation expense of $8.2 million, and $25.8 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2024.

Current wording

Cash flows provided by operations were $80.3 million for the six months ended June 30, 2025, primarily due to our net income of $28.5 million being adjusted for noncash items of amortization of intangible assets of $28.3 million, stock-based compensation expense of $16.9 million, and $9.0 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2024.

Previous wording

Net cash used in investing activities was $4.9 million for the three months ended March 31, 2026, primarily due to purchases of short-term investments in marketable securities of $9.0 million, purchases of intangible assets of $5.5 million, and proceeds from maturities of marketable securities of $10.1 million.

Current wording

Net cash used in investing activities was $16.8 million for the six months ended June 30, 2026, primarily due to purchases of short-term investments in marketable securities of $19.3 million, purchases of intangible assets of $15.0 million, and proceeds from maturities of marketable securities of $18.4 million.

Previous wording

Net cash used in investing activities was $6.2 million for the three months ended March 31, 2025, primarily due to purchases of short-term investments in marketable securities of $7.2 million, purchases of intangible assets of $5.4 million, and proceeds from maturities of marketable securities of $6.6 million.

Current wording

Net cash used in investing activities was $6.2 million for the six months ended June 30, 2025, primarily due to purchases of short-term investments in marketable securities of $13.0 million, purchases of intangible assets of $5.4 million, and proceeds from maturities of marketable securities of $12.6 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 three months ended March 31, 2026 and 2025, we spent $0.4 million and $0.2 million on capital expenditures, respectively. Our capital expenditures for intangible assets consists primarily of acquired patents. During the three months ended March 31, 2026 and 2025, we spent $5.5 million and $5.4 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.

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 the six months ended June 30, 2026 and 2025, we spent $1.0 million and $0.4 million on capital expenditures, respectively. Our capital expenditures for intangible assets consists primarily of acquired patents. During the six months ended June 30, 2026 and 2025, we spent $15.0 million and $5.4 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 $73.4 million for the three months ended March 31, 2026, primarily due to $28.1 million in repayment of indebtedness, $5.5 million in dividends paid, $29.8 million in repurchases of common stock for tax withholdings on equity awards, and $10.0 million in repurchases of common stock.

Current wording

Net cash used in financing activities was $96.6 million for the six months ended June 30, 2026, primarily due to $34.2 million in repayment of indebtedness, $11.0 million in dividends paid, $32.9 million in repurchases of common stock for tax withholdings on equity awards, and $20.0 million in repurchases of common stock.

Previous wording

Net cash used in financing activities was $45.6 million for the three months ended March 31, 2025, primarily due to $17.1 million in repayment of indebtedness, $5.4 million in dividends paid, $12.0 million in repurchases of common stock for tax withholdings on equity awards, and $10.0 million in repurchases of common stock.

Current wording

Net cash used in financing activities was $68.7 million for the six months ended June 30, 2025, primarily due to $28.2 million in repayment of indebtedness, $10.9 million in dividends paid, $19.7 million in repurchases of common stock for tax withholdings on equity awards, and $11.3 million in repurchases of common stock.

Previous wording

As of March 31, 2026, $398.6 million was outstanding under the term loan B facility. In addition, we had $7.4 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt. The interest rate on the Term Loan B, including the amortization of debt discount and issuance costs, was 7.3% and interest is payable monthly.

Current wording

As of June 30, 2026, $392.6 million was outstanding under the term loan B facility. In addition, we had $6.5 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt. The interest rate on the Term Loan B, including the amortization of debt discount and issuance costs, was 7.1% and interest is payable monthly.

Previous wording

Under the existing loan agreement, we have future minimum principal payments for our debt of $18.3 million in the remainder of 2026, $24.4 million in 2027, with the remaining principal balance of $356.0 million 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 we made during the year ended December 31, 2025, no excess cash flow payment is required in 2026. The term loan B facility contains customary covenants, and as of March 31, 2026, 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 $12.2 million in the remainder of 2026, $24.4 million in 2027, with the remaining principal balance of $356.0 million 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 we made during the year ended December 31, 2025, no excess cash flow payment is required in 2026. The term loan B facility contains customary covenants, and as of June 30, 2026, we were in full compliance with such covenants.

Previous wording

During the three months ended March 31, 2026, there were no significant changes in our critical accounting policies and estimates. See “Note 2 –Summary of Significant Accounting Policies” of Notes to Condensed Consolidated Financial Statements for additional detail. For a discussion of our critical accounting policies and estimates, see Part II, Item 7 –Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K.

Current wording

During the six months ended June 30, 2026, there were no significant changes in our critical accounting policies and estimates. See “Note 2 –Summary of Significant Accounting Policies” of Notes to Condensed Consolidated Financial Statements for additional detail. For a discussion of our critical accounting policies and estimates, see Part II, Item 7 –Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K.