InterDigital, Inc.

Previous wording

During first quarter 2026, the 2027 Notes had a dilutive impact of 4.4 million shares, which are offset from an economic standpoint by the 2027 Note Hedge Transactions and would result in no incremental outstanding shares after conversion. However, under Generally Accepted Accounting Principles in the United States ("GAAP"), we are required to exclude the impact of the shares received from the 2027 Note Hedge Transactions counterparties from the calculation of weighted-average diluted shares outstanding.

Current wording

During second quarter 2026, the 2027 Notes had a dilutive impact of 3.7 million shares, which is offset from an economic standpoint by the 2027 Note Hedge Transactions and would result in no incremental outstanding shares after conversion. However, under GAAP, we are required to exclude the impact of the shares received from the 2027 Note Hedge Transactions counterparties from the calculation of weighted-average diluted shares outstanding.

Previous wording

During the period from January 1, 2024 through June 30, 2026, holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes. In December 2025, holders elected to convert $80.0 million principal amount of the 2027 Notes, which was settled in the first quarter of 2026. We paid the $80.0 million principal amount in cash and issued 0.8 million shares to settle the conversion spread. These shares issued were offset by 0.8 million shares received upon partial settlement of the 2027 Note Hedge Transactions, resulting in no incremental outstanding shares resulting from the conversion.

Current wording

From the period January 1, 2024 through September 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. As of June 30, 2026, $380.0 million in principal of the 2027 Notes remains outstanding, of which holders had elected to convert $80.3 million principal amount, which will settle in third quarter 2026. No incremental outstanding shares will result from such conversions.

Previous wording

As of March 31, 2026, 6.0 million warrants remain outstanding related to the 2027 Warrant Transactions at a weighted-average strike price of $105.55 per share, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028. Refer to "Financial Position, Liquidity, and Capital Resources — Convertible Notes" for further information regarding how changes in our stock price would affect the number of shares issuable related to the 2027 Warrant Transactions. For example, if the share price were $350, we would issue 4.2 million shares of common stock related to the 2027 Warrant Transactions.

Current wording

As of June 30, 2026, 6.0 million warrants remain outstanding related to the 2027 Warrant Transactions at a strike price of $105.43 per share, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028. Refer to "Financial Position, Liquidity, and Capital Resources — Convertible Notes" for further information regarding how changes in our stock price would affect the number of shares issuable related to the 2027 Warrant Transactions. For example, if the share price averaged $275 between September 2027 and April 2028, we would issue 3.7 million shares of common stock related to the 2027 Warrant Transactions.

Previous 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.

Current wording

In June 2026, we announced a regular quarterly cash dividend of $0.70 per share, which is a 17% increase compared to the dividend declared in second quarter 2025. During second quarter 2026, we returned $41.0 million to shareholders, including $23.0 million through the repurchase of shares of common stock and $18.1 million, or $0.70 per share, of cash dividends declared.

Previous 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.

Current wording

As of June 30, 2026, there was $96.1 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 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.

Current wording

As of June 30, 2026, we had $1.1 billion of cash, restricted cash, and short-term investments and approximately $1.9 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 and Amazon arbitrations.

Previous 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.

Current wording

93% of our second 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 months ended March 31, 2026 and 2025, 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 and six months ended June 30, 2026 and 2025, including the resulting operating cash flow (in thousands):

Previous 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.

Current wording

Second quarter 2026 revenue of $260.2 million includes $103.7 million of catch-up revenue, while second quarter 2025 revenue of $300.6 million includes $162.3 million of catch-up revenue. The $40.4 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 second quarter 2025. In second quarter 2026, revenue (in descending order) from Amazon, Apple, and Samsung each comprised 10% or more of our consolidated revenue. Refer to "Results of Operations — Second Quarter 2026 Compared to Second Quarter 2025" for further discussion of our 2026 revenue.

Previous wording

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

Current wording

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

Previous 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.

Current wording

•Our second quarter 2026 revenue includes $103.7 million of catch-up revenue primarily related to the Amazon agreement signed in second quarter 2026.

Previous 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.

Current wording

The net decrease in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash used in financing activities of $211.3 million and cash used in investing activities of $29.3 million, excluding sales and purchases of short-term investments, partially offset by cash provided by operating activities of $98.6 million. Refer to the sections below for further discussion of these items.

Previous wording

Cash flows provided by (used in) operating activities

Current wording

Cash flows provided by operating activities

Previous wording

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

Current wording

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

Previous 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):

Current 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 $13.5 million change in cash provided by 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 operating activities during the six months ended June 30, 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 $27.5 million and $2.6 million in first quarter 2026 and 2025, 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 $28.4 million and $5.2 million in first half 2026 and 2025, respectively.

Previous 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.

Current wording

Net cash used in investing activities for first half 2026 was $17.2 million, a $5.0 million change from $22.2 million in first half 2025. During first half 2026, we sold $12.1 million of short-term marketable securities, net of purchases, and capitalized $31.0 million of patent costs and capital expenditures. During first half 2025, we sold $18.0 million of short-term marketable securities, net of purchases, and capitalized $40.2 million of patent costs and capital expenditures.

Previous 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.

Current wording

Net cash used in financing activities for first half 2026 was $211.3 million, a change of $125.6 million from $85.6 million in first half 2025. This change was primarily attributable to an $80.0 million payment related to the partial conversion of the 2027 Notes in first half 2026. The change also reflects higher cash outflows in 2026, including a $22.6 million increase in taxes withheld on restricted stock unit vestings due to a higher share price at vesting and a $9.0 million increase in dividends paid following the increases in the declared dividend from $0.60 to $0.70. In addition, during first half 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 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.

Current wording

Our combined short-term and long-term deferred revenue balance as of June 30, 2026 was approximately $442.2 million, a net increase of $112.6 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 March 31, 2026 deferred revenue balance of $420.5 million by $261.1 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 June 30, 2026 deferred revenue balance of $442.2 million by $325.7 million over the next twelve months.

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 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.

Current wording

At the time we issued the 2027 Notes, we entered into the 2027 Note Hedge Transactions and 2027 Warrant Transactions (collectively, 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 $105.55 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.

Current wording

During periods in which the average market price of our common stock is above the applicable conversion price of the 2027 Notes (conversion price of approximately $76.72 per share, subject to adjustment), or above the strike price of the warrants (strike price of $105.43 per share, subject to adjustment), 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

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

Current wording

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

Previous wording

Total revenue of $205.4 million was relatively flat compared to first quarter 2025, decreasing slightly primarily due to lower catch-up revenue recognized from the LG TV and Sony agreements in first quarter 2026, as compared to catch-up revenue from vivo Mobile in first quarter 2025, and the expiration of the Samsung TV agreement. This decrease was partially offset by new revenue from the Samsung arbitration decision and from thirteen new patent license agreements signed in the last twelve months.

Current wording

Total revenue of $260.2 million decreased compared to second quarter 2025, primarily due to catch-up revenue from the Samsung arbitration and HP agreement recognized in second quarter 2025, partially offset by catch-up revenue from the Amazon agreement recognized in second quarter 2026. This decrease was partially offset by revenue from thirteen new agreements signed in the last twelve months, including the Amazon agreement and the previously announced Xiaomi, Honor, and LG TV agreements.

Previous 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:

Current wording

In second quarter 2026 and 2025, 68% and 78%, respectively, of our total revenue was attributable to licensees that individually accounted for 10% or more of our total revenue. In second 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 first quarter 2026 and first quarter 2025 by category (in thousands):

Current wording

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

Previous 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):

Current wording

Operating expenses increased to $120.9 million in second quarter 2026 compared to $95.2 million in second quarter 2025. The $25.8 million increase in total operating expenses was primarily due to changes in the following items (in thousands):

Previous 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.

Current wording

Licensing expense: Licensing expense increased compared to second quarter 2025 primarily due to the above-noted change in intellectual property enforcement costs.

Previous 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.

Current wording

General and administrative expense: General and administrative expense increased compared to second quarter 2025 primarily due to the above-noted increase in share-based compensation costs.

Previous wording

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

Current wording

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

Previous 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.

Current 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 $1.5 million in second quarter 2026, compared to a $3.6 million net gain in second quarter 2025.

Previous 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.

Current wording

In second 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 18.8% and 14.4%, respectively. The change in effective tax rate is primarily due to an increase in the amount of non-deductible officer’s compensation.

Previous wording

The $44.5 million increase in operating expenses was driven by a $24.8 million increase in revenue share costs, primarily related to the catch-up revenue recognized on the LG TV agreement signed in first quarter 2026, and a $10.5 million increase in intellectual property enforcement costs related to the Disney, Amazon, and Transsion proceedings. These enforcement costs are expected to continue through 2026 and could increase as these and other matters progress. In addition, personnel-related costs increased $4.3 million primarily due to higher wages and employer-paid payroll taxes.

Current wording

The $70.2 million increase in operating expenses was driven by a $23.2 million increase in revenue share costs due to catch-up revenue recognized on the LG TV agreement signed in first half 2026 and by a $13.1 million increase in share-based compensation costs driven by recent business successes. Additionally, intellectual property enforcement costs increased $24.0 million primarily related to ongoing proceedings.

Previous 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.

Current wording

Research and portfolio development expense: Research and portfolio development expense increased compared to first half 2025 primarily due to increases in personnel-related costs and depreciation costs.

Previous wording

•risks related to any new accounting standards or our assumptions and application of relevant accounting standards, including with respect to revenue recognition.

Current wording

•risks related to any new accounting standards or our estimates, assumptions and the application of relevant accounting standards, including with respect to revenue recognition.