InterDigital, Inc.

Previous wording

For more information on the Disney proceedings, see Note 6, “Litigation and Legal Proceedings,” to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

For more information on these proceedings, see Note 6, “Litigation and Legal Proceedings,” to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

In September 2025, we announced a second dividend increase during 2025, increasing the quarterly cash dividend by $0.10 per share to $0.70 per share, beginning with the quarterly dividend paid in fourth quarter 2025. Combined with previous increases, we have increased the dividend by 75% since the start of 2024. During third quarter 2025, we returned $53.3 million to shareholders, including $18.0 million, or $0.70 per share, of cash dividends declared and $35.3 million through the repurchase of shares of common stock.

Current wording

In March 2026, we announced a regular quarterly cash dividend of $0.70 per share, which is a 17% increase compared to the dividend declared in first quarter 2025. During first quarter 2026, we returned $26.3 million to shareholders, including $18.1 million, or $0.70 per share, of cash dividends declared and $8.2 million through the repurchase of shares of common stock. We also reduced our debt by $88.0 million, including the $80.0 million principle payment on the conversion of the 2027 Notes.

Previous wording

As of October 30, 2025, there was $147.9 million remaining under the share repurchase authorization, which we plan to utilize to periodically repurchase additional common shares. See Part II, Item 2 -Unregistered Sales of Equity Securities and Use of Proceeds—Issuer Purchases of Equity Securities of this Quarterly Report on Form 10-Q.

Current wording

As of April 30, 2026, there was $108.0 million remaining under the share repurchase authorization, which we plan to utilize to periodically repurchase additional common shares. See Part II, Item 2 -Unregistered Sales of Equity Securities and Use of Proceeds—Issuer Purchases of Equity Securities of this Quarterly Report on Form 10-Q.

Previous wording

As of September 30, 2025, we had $1.3 billion of cash, restricted cash, and short-term investments and approximately $1.6 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under the Lenovo arbitration.

Current wording

As of March 31, 2026, we had $1.1 billion of cash, restricted cash, and short-term investments and approximately $1.7 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under the Lenovo arbitration.

Previous wording

91% of our third quarter 2025 revenue is from fixed-fee agreements. Such agreements often have prescribed payment schedules that are uneven and sometimes front-loaded, resulting in timing differences between when we collect the cash payments and recognize the related revenue.

Current wording

94% of our first quarter 2026 revenue came from fixed-fee agreements. Such agreements often have prescribed payment schedules that are uneven and sometimes front-loaded, resulting in timing differences between when we collect the cash payments and recognize the related revenue.

Previous wording

The following table reconciles the timing differences between cash receipts and recognized revenue during the three and nine months ended September 30, 2025 and 2024, including the resulting operating cash flow (in thousands):

Current wording

The following table reconciles the timing differences between cash receipts and recognized revenue during the three months ended March 31, 2026 and 2025, including the resulting operating cash flow (in thousands):

Previous wording

Third quarter 2025 revenue of $164.7 million includes $17.7 million of catch-up revenue, while third quarter 2024 revenue of $128.7 million includes $30.0 million of catch-up revenue. The $36.0 million increase was primarily due to recurring revenue recognized from nine patent license agreements signed since third quarter 2024, partially offset by lower catch-up revenue in third quarter 2025. In third quarter 2025, revenue (in descending order) from Samsung, Apple, and Honor each comprised 10% or more of our consolidated revenue. Refer to "Results of Operations --Third Quarter 2025 Compared to Third Quarter 2024" for further discussion of our 2025 revenue.

Current wording

First quarter 2026 revenue of $205.4 million includes $63.6 million of catch-up revenue, while first quarter 2025 revenue of $210.5 million includes $84.8 million of catch-up revenue. The $5.1 million decrease in total revenue was driven by lower catch-up revenue, partially offset by recurring revenue recognized from thirteen patent license agreements signed since first quarter 2025. In first quarter 2026, revenue (in descending order) from LG, Apple, and Samsung each comprised 10% or more of our consolidated revenue. Refer to "Results of Operations — First Quarter 2026 Compared to First Quarter 2025" for further discussion of our 2026 revenue.

Previous wording

We have been actively monitoring the impact of the current macroeconomic environment in the U.S. and globally characterized by market volatility, inflation, supply chain issues, high interest rates, tariffs and other potential trade-related sanctions, and the potential for a recession. These market factors, as well as the impacts of the Ukraine-Russia and Middle East conflicts, have not had a material impact on our business to date. However, if these conditions continue or worsen, they could have an adverse effect on our operating results and our financial condition.

Current wording

We have been actively monitoring the impact of the current macroeconomic environment in the U.S. and globally characterized by market volatility, inflation, supply chain issues, high interest rates, tariffs and other potential trade-related sanctions, and the potential for a recession. These market factors, as well as the impacts of global conflicts, have not had a material impact on our business to date. However, if these conditions continue or worsen, they could have an adverse effect on our operating results and our financial condition.

Previous wording

When comparing third quarter 2025 financial results against other periods, the following items should be taken into consideration:

Current wording

When comparing first quarter 2026 financial results against other periods, the following items should be taken into consideration:

Previous wording

•Our third quarter 2025 revenue includes $17.7 million of catch-up revenue primarily related to the new patent license agreement with Honor signed in third quarter 2025.

Current wording

•Our first quarter 2026 revenue includes $63.6 million of catch-up revenue primarily related to the new patent license agreements with LG and Sony signed in first quarter 2026.

Previous wording

Our significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", in the notes to consolidated financial statements included in our 2024 Form 10-K. A discussion of our critical accounting policies, and the estimates related to them, are included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K. There have been no material changes to our existing critical accounting policies from the disclosures included in our 2024 Form 10-K. Refer to Note 1, “Basis of Presentation,” in the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for updates related to new accounting pronouncements and changes in accounting policies.

Current wording

Our significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", in the notes to condensed consolidated financial statements included in our 2025 Form 10-K. A discussion of our critical accounting policies, and the estimates related to them, are included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K. There have been no material changes to our existing critical accounting policies from the disclosures included in our 2025 Form 10-K. Refer to Note 1, “Basis of Presentation,” in the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for updates related to new accounting pronouncements and changes in accounting policies.

Previous wording

The net increase in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash provided by operating activities of $481.1 million, partially offset by cash used in financing activities of $147.0 million and cash used in investing activities of $55.3 million, excluding sales and purchases of short-term investments. Refer to the sections below for further discussion of these items.

Current wording

The net decrease in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash used in financing activities of $169.2 million and cash used in investing activities of $13.4 million, excluding sales and purchases of short-term investments, partially offset by cash provided by operating activities of $16.1 million. Refer to the sections below for further discussion of these items.

Previous wording

Cash flows provided by operating activities

Current wording

Cash flows provided by (used in) operating activities

Previous wording

Cash flows provided by operating activities in the first nine months 2025 and 2024 (in thousands) were as follows:

Current wording

Cash flows provided by (used in) operating activities in the first quarter 2026 and 2025 (in thousands) were as follows:

Previous wording

Our cash flows provided by operating activities are principally derived from cash receipts from patent license agreements, offset by cash operating expenses and income tax payments. The $401.6 million change in cash provided by operating activities was primarily driven by higher cash receipts from timing of cash receipts on existing agreements and new agreements, and was partially offset by higher foreign withholding tax payments on those cash receipts. Additionally, cash operating expenses were lower primarily due to lower revenue share and litigation costs. The table below sets forth the significant items comprising our cash flows provided by operating activities during the nine months ended September 30, 2025 and 2024 (in thousands):

Current wording

Our cash flows provided by (used in) operating activities are principally derived from cash receipts from patent license agreements, offset by cash operating expenses and income tax payments. The $36.1 million change in cash provided by (used in) operating activities was primarily driven by higher cash receipts due to the timing of receipts under new and existing agreements and was partially offset by higher cash operating expenses, including increased revenue share and intellectual property enforcement costs. The table below sets forth the significant items comprising our cash flows provided by (used in) operating activities during the three months ended March 31, 2026 and 2025 (in thousands):

Previous wording

(a) Cash operating expenses include operating expenses less depreciation and disposals of fixed assets, amortization of patents, and non-cash compensation. Amount includes revenue share costs of $7.6 million and $78.7 million in first nine months 2025 and 2024, respectively.

Current wording

(a) Cash operating expenses include operating expenses less depreciation and disposals of fixed assets, amortization of patents, and non-cash compensation. Amount includes revenue share costs of $27.5 million and $2.6 million in first quarter 2026 and 2025, respectively.

Previous wording

Net cash used in investing activities for first nine months 2025 was $36.9 million, a $176.3 million change from $139.4 million provided by investing activities in first nine months 2024. During first nine months 2025, we sold $18.3 million of short-term marketable securities, net of purchases, and capitalized $55.3 million of patent costs and property and equipment purchases. During first nine months 2024, we sold $173.2 million of short-term marketable securities, net of purchases, and capitalized $35.4 million of patent costs and property and equipment purchases.

Current wording

Net cash provided by investing activities for first quarter 2026 was $16.4 million, a $43.1 million change from $59.5 million in first quarter 2025. During first quarter 2026, we sold $29.8 million of short-term marketable securities, net of purchases, and capitalized $15.1 million of patent costs and property and equipment purchases. During first quarter 2025, we sold $86.2 million of short-term marketable securities, net of purchases, and capitalized $26.7 million of patent costs and property and equipment purchases.

Previous wording

Net cash used in financing activities for first nine months 2025 was $147.0 million, a change of $104.0 million from $251.0 million the first nine months 2024. This change was primarily attributable to a $126.2 million payment made on maturity of the 2024 Notes in first half 2024 and $7.3 million of proceeds from the exercise of stock options. This change was partially offset by a $28.9 million increase of taxes withheld on restricted stock unit vestings primarily due to the increased share price at vesting and a $12.2 million increase in dividends paid due to the announced increases in the declared dividend from $0.40 to $0.70.

Current wording

Net cash used in financing activities for first quarter 2026 was $169.2 million, a change of $126.2 million from $43.0 million in first quarter 2025. This change was primarily attributable to an $80.0 million payment related to the partial conversion of the 2027 Notes in first quarter 2026. The change also reflects higher cash outflows in 2026, including a $22.8 million increase in taxes withheld on restricted stock unit vestings due to a higher share price at vesting and a $6.4 million increase in dividends paid following the increases in the declared dividend from $0.45 to $0.70. In addition, during first quarter 2025, we received $7.3 million due to the exercise of stock options.

Previous wording

Our combined short-term and long-term deferred revenue balance as of September 30, 2025 was approximately $411.9 million, a net increase of $51.8 million from December 31, 2024. This increase in deferred revenue was primarily due cash receipts on new and existing patent license agreements, partially offset by amortization of deferred revenue recognized in the period.

Current wording

Our combined short-term and long-term deferred revenue balance as of March 31, 2026 was approximately $420.5 million, a net increase of $90.9 million from December 31, 2025. This increase in deferred revenue was primarily due to cash receipts on new and existing patent license agreements, partially offset by amortization of deferred revenue recognized in the period.

Previous wording

Based on current license agreements, we expect the amortization of dynamic fixed-fee royalty payments to reduce the September 30, 2025 deferred revenue balance of $411.9 million by $234.5 million over the next twelve months.

Current wording

Based on current license agreements, we expect the amortization of dynamic fixed-fee royalty payments to reduce the March 31, 2026 deferred revenue balance of $420.5 million by $261.1 million over the next twelve months.

Previous wording

From the period January 1, 2024 through December 31, 2025, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes.

Current wording

From January 1, 2024 through June 30, 2026, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes.

Previous wording

Our 2027 Notes are included in the dilutive earnings per share calculation using the if-converted method. Under the if-converted method, we must assume that conversion of convertible securities occurs at the beginning of the reporting period. The 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any remaining obligations may be settled in cash, shares of the Company’s common stock, or a combination thereof. As the principal amount must be paid in cash and only the conversion spread is settled in shares, we only include the net number of incremental shares that would be issued upon conversion. We must calculate the number of shares of our common stock issuable under the terms of the 2027 Notes based on the average market price of our common stock during the applicable reporting period and include that number in the total diluted shares figure for the period.

Current wording

Our 2027 Notes are included in the diluted earnings per share ("diluted EPS") calculation using the if-converted method in accordance with GAAP. Under the if-converted method, we assume that conversion of convertible securities occurs at the beginning of the reporting period. The 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any value in excess of the principal amount ("the conversion spread") may be settled in cash, shares of the Company’s common stock, or a combination thereof. As the principal amount is required to be paid in cash and only the conversion spread may result in shares being issued, we only include the net number of incremental shares that would be issued upon conversion. We calculate the number of shares of our common stock issuable under the terms of the 2027 Notes based on the average market price of our common stock during the applicable reporting period and include that number in the weighted‑average diluted shares outstanding for the period.

Previous wording

At the time we issued the 2027 Notes, we entered into the 2027 Call Spread Transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the 2027 Notes by, in effect, increasing the conversion price of the 2027 Notes from our economic standpoint. However, under GAAP, since the impact of the 2027 Note Hedge Transactions is anti-dilutive, we exclude from the calculation of fully diluted shares the number of shares of our common stock that we would receive from the counterparties to these agreements upon settlement.

Current wording

At the time we issued the 2027 Notes, we entered into the 2027 Call Spread Transactions that together were designed to have the economic effect of reducing potential dilution upon conversion of the 2027 Notes by, in effect, increasing the conversion price of the 2027 Notes on an economic basis. However, under GAAP, since the impact of the 2027 Note Hedge Transactions is anti-dilutive, we exclude from the calculation of diluted EPS the shares of our common stock that we would receive from the counterparties upon settlement of the 2027 Note Hedge Transactions.

Previous wording

During periods in which the average market price of our common stock is above the applicable conversion price of the 2027 Notes (initial conversion price of approximately $77.49 per share), or above the strike price of the warrants (weighted average strike price of $105.77 per share), the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share. As a result, in periods where the average market price of our common stock is above the conversion price or strike price, as applicable, under the if-converted method, we calculate the number of shares issuable under the terms of the 2027 Notes and the 2027 Warrant Transactions based on the average market price of the stock during the period, and include that number in the total diluted shares outstanding for the period.

Current wording

During periods in which the average market price of our common stock is above the applicable conversion price of the 2027 Notes (initial conversion price of approximately $77.49 per share), or above the strike price of the warrants (weighted average strike price of $105.55 per share), the impact of conversion of the 2027 Notes or exercise of the warrants, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share. In those periods, we calculate the incremental shares associated with the 2027 Notes (under the if‑converted method) or the warrants based on the average market price of our common stock during the period and include those incremental shares in weighted‑average diluted shares outstanding.

Previous wording

Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the fully diluted earnings per share calculation. As described in Note 5, "Obligations," the 2027 Notes are convertible into cash up to the aggregate principal amount to be converted and any remaining obligations may be settled in cash, shares of the Company’s common stock or a combination thereof ("net share settlement"). Assuming net share settlement upon conversion, the following tables illustrate how, based on the $460.0 million aggregate principal amount of the 2027 Notes outstanding as of September 30, 2025, and the approximately 5.9 million warrants related to the 2027 Notes, changes in our stock price would affect (i) the number of shares issuable upon conversion of the 2027 Notes, (ii) the number of shares issuable upon exercise of the warrants subject to the 2027 Warrant Transactions, (iii) the number of additional shares deemed outstanding with respect to the 2027 Notes, after applying the if-converted method, for purposes of calculating diluted earnings per share ("Total If-Converted Method Incremental Shares"), (iv) the number of shares of our common stock deliverable to us upon settlement of the 2027 Note Hedge Transactions and (v) the number of shares issuable upon concurrent conversion of the 2027 Notes, exercise of the warrants subject to the 2027 Warrant Transactions, and settlement of the 2027 Note Hedge Transactions (in thousands):

Current wording

Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the diluted EPS calculation. As described in Note 5, "Obligations" in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, the 2027 Notes are convertible into cash up to the aggregate principal amount of 2027 Notes to be converted and any remaining obligations may be settled in cash, shares of the Company’s common stock or a combination thereof ("net share settlement"). Assuming net share settlement upon conversion, the following table illustrates how changes in our stock price would affect the shares issuable under the 2027 Notes and related warrant transactions, the incremental shares included in diluted EPS under the if‑converted method (“Total Incremental Shares”), the shares deliverable to us under the 2027 Note Hedge Transactions, and the resulting net incremental shares, based on $380.0 million aggregate principal amount outstanding and approximately 6.0 million related warrants as of March 31, 2026 (in thousands):

Previous wording

The following table compares third quarter 2025 revenue to third quarter 2024 revenue (in thousands):

Current wording

The following table compares first quarter 2026 revenue to first quarter 2025 revenue (in thousands):

Previous wording

In third quarter 2025 and 2024, 54% and 83%, respectively, of our total revenue was attributable to licensees that individually accounted for 10% or more of our total revenue. In third quarter 2025 and 2024, the following licensees accounted for 10% or more of our total revenue:

Current wording

In first quarter 2026 and 2025, 61% and 71%, respectively, of our total revenue was attributable to licensees that individually accounted for 10% or more of our total revenue. In first quarter 2026 and 2025, the following licensees accounted for 10% or more of our total revenue:

Previous wording

The following table summarizes the changes in operating expenses between third quarter 2025 and third quarter 2024 by category (in thousands):

Current wording

The following table summarizes the changes in operating expenses between first quarter 2026 and first quarter 2025 by category (in thousands):

Previous wording

Operating expenses remained flat at $88.9 million in third quarter 2025 compared to $89.3 million in third quarter 2024. The $0.5 million decrease in total operating expenses was primarily due to changes in the following items (in thousands):

Current wording

Operating expenses increased to $123.2 million in first quarter 2026 compared to $78.7 million in first quarter 2025. The $44.5 million increase in total operating expenses was primarily due to changes in the following items (in thousands):

Previous wording

Research and portfolio development expense: Research and portfolio development expense increased slightly compared to first nine months 2024 primarily due to the above noted increase in depreciation and amortization.

Current wording

Research and portfolio development expense: Research and portfolio development expense increased compared to first quarter 2025 primarily due to the above noted increase in personnel-related costs.

Previous wording

Licensing expense: Licensing expense decreased compared to third quarter 2024 primarily due to the above noted changes in revenue share and intellectual property enforcement costs, partially offset by the one-time net litigation fee reimbursement contra expense recognized in third quarter 2024.

Current wording

Licensing expense: Licensing expense increased compared to first quarter 2025 primarily due to the above noted changes in revenue share and intellectual property enforcement costs.

Previous wording

General and administrative expense: General and administrative expense increased compared to third quarter 2024 primarily due to an increase in share-based compensation costs.

Current wording

General and administrative expense: General and administrative expense increased compared to first quarter 2025 primarily due to the above noted increase in personnel-related costs.

Previous wording

The following table compares first nine months 2025 non-operating income, net to first nine months 2024 non-operating expense, net (in thousands):

Current wording

The following table compares first quarter 2026 non-operating expense, net to first quarter 2025 non-operating income, net (in thousands):

Previous wording

The change in non-operating income, net was primarily due to a foreign currency translation net loss arising from translation of our foreign subsidiaries of $0.6 million in third quarter 2025, compared to a $2.8 million net gain in third quarter 2024.

Current wording

The change in non-operating (expense) income, net was primarily due to a foreign currency translation net loss arising from translation of our foreign subsidiaries of $2.9 million in first quarter 2026, compared to a $2.2 million net gain in first quarter 2025.

Previous wording

In third quarter 2025 and 2024, based on the statutory federal tax rate net of discrete federal and state taxes, we had an effective tax rate of 11.2% and 17.0%, 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 and tax benefits related to share-based compensation. In addition, the Company is subject to a decrease in the Global Intangible Low-Tax Income inclusion derived from the decrease in revenue in certain foreign jurisdictions.

Current wording

In first quarter 2026 and 2025, based on the statutory federal tax rate net of discrete federal and state taxes, we had an effective tax rate of 5.6% and 12.6%, respectively. The change in effective tax rate was primarily due to an increase in the amount of tax benefits related to share-based compensation.

Previous wording

•the resolution of legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith;

Current wording

•the initiation of new legal proceedings or the resolution of ongoing legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith;

Previous wording

•the potential effects of macroeconomic conditions or trade conflicts;

Current wording

•the potential effects of macroeconomic conditions or global conflicts;