InterDigital (IDCC) 46th Annual William Blair Growth Stock Conference summary

Business overview and strategy

• Focuses on R&D in wireless, AI, and video codec, building a large patent portfolio and licensing IP to major vendors globally.

• Revenue is reinvested into R&D to drive next-generation technology, with a business model centered on recurring licensing and patent leadership in industry standards.

• Holds over 40,000 patent assets, with rapid growth in portfolio size and daily patent grants.

• Aggressively deploys capital in share buybacks and dividends, driving EPS and EBITDA growth faster than revenue.

• Long-term contracts with major smartphone vendors provide business stability and predictability.

Smartphone licensing and growth

• Achieved 85% market coverage in smartphones, licensing 8 of the top 10 vendors, with recurring revenue rising from $300M to $490M.

• Growth drivers include adding unlicensed vendors, renegotiating contracts as vendor volumes grow, and increasing IP content per device with new technologies.

• Contracts typically last five years, with sophisticated renewal negotiations reflecting portfolio growth and device usage.

• Catch-up payments for past infringement have contributed over $1B in revenue in the past five years.

• 6G innovation is a key future growth area, with engineers dedicated to standards leadership and technology advancement.

Standards leadership and R&D

• Plays a leading role in global standards bodies, holding multiple chair positions in 3GPP, enhancing influence over wireless standards.

• Each wireless generation builds on the previous, allowing for cumulative licensing value as devices support multiple generations.

• R&D efforts are focused on foundational, system-level problems in wireless, video, and AI, ensuring continued IP relevance.