WILMINGTON, DE — InterDigital Inc. (Nasdaq: IDCC) raised its 2026 revenue outlook after third-quarter profit climbed 19%, as new patent licensing agreements and expanding consumer electronics revenue strengthened the Wilmington-based technology developer’s financial performance.
The company reported October 29 that revenue increased 17% to $193.4 million for the quarter ended September 30, compared with $164.7 million a year earlier. Net income rose to $80.2 million from $67.5 million, while diluted earnings per share increased to $2.34 from $1.93.
InterDigital now expects full-year revenue of $813 million to $819 million, with the midpoint supported entirely by existing contracts. The forecast excludes revenue from additional licensing agreements or patent enforcement actions that could occur during the fourth quarter.
The company projected fourth-quarter revenue of $154 million to $160 million and full-year adjusted earnings before interest, taxes, depreciation and amortization of $507 million to $515 million.
Annualized recurring revenue reached a record $628.9 million, up 7% from $588 million a year earlier. The measure excludes catch-up licensing revenue and annualizes the remaining quarterly revenue, providing an indication of the company’s recurring licensing business rather than a forecast of future receipts.
InterDigital recorded $36.2 million in catch-up revenue during the quarter, more than double the $17.7 million reported in the comparable 2025 period.
The company’s licensing portfolio continued shifting beyond smartphones. Revenue from consumer electronics, Internet of Things and automotive applications nearly doubled to $55.7 million from $28.2 million, while streaming and cloud services contributed $15 million.
Smartphone licensing revenue declined 10% to $122.6 million from $136.4 million.
InterDigital reached an agreement with a major personal computer manufacturer, with final licensing terms subject to binding arbitration. The agreement extends the company’s licensing coverage to four of the world’s five largest PC manufacturers.
The company also signed an Internet of Things licensing agreement with electric vehicle charging equipment manufacturer KEBA.
President and Chief Executive Officer Liren Chen attributed the stronger outlook to licensing activity and existing contractual commitments.
“Our strong execution in Q3 supports another increase to the midpoint of our full-year revenue guidance, this time based only on revenue already under contract,” Chen stated.
Patent enforcement also remained part of the company’s licensing strategy. InterDigital reported securing two additional injunctions against Disney through Europe’s Unified Patent Court, bringing its total to eight injunctions across eight patent cases decided to date.
Adjusted EBITDA increased 25% to $131.3 million from $104.9 million, with the adjusted margin expanding to 68% from 64%. Non-GAAP net income rose 22% to $95.7 million, while adjusted earnings per share increased to $3.11 from $2.55.
Operating expenses climbed 6% to $94.1 million, reflecting higher research, portfolio development and licensing expenditures.
Despite the third-quarter improvement, InterDigital’s nine-month results remained below the prior year. Revenue totaled $659 million, compared with $675.8 million in the first nine months of 2025, while net income declined to $271.9 million from $363.7 million.
Operating cash flow totaled $150.4 million for the third quarter, down from $395.9 million a year earlier. For the first nine months, operating cash flow declined to $249 million from $481.1 million.
InterDigital ended September with approximately $1.12 billion in cash, cash equivalents and short-term investments, compared with $1.24 billion at the end of 2025.
The company also continued returning capital to shareholders and reducing debt. During the quarter, it repurchased $18.7 million in common stock, declared $19.3 million in dividends and made $83.2 million in debt-related payments.
Its quarterly dividend increased to 75 cents per share from 70 cents.
InterDigital reported $296.7 million in outstanding principal on its 3.50% convertible notes due in 2027. The notes are convertible during the fourth quarter of 2026, with $2.2 million in principal already elected for conversion and scheduled to settle during the quarter.
The company stated that hedging arrangements would offset any incremental shares associated with those conversions. Separate warrants covering approximately 6 million shares, with a $105.30 exercise price subject to adjustment, remain outstanding and begin expiring in September 2027.
For the fourth quarter, InterDigital expects adjusted EBITDA of $80 million to $88 million and diluted earnings per share of $1.04 to $1.27. Its full-year diluted earnings forecast is $8.93 to $9.16 per share.
InterDigital develops and licenses wireless communications, video and artificial intelligence technologies used by device manufacturers, automotive companies and digital service providers.
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