IDCC Q2 Earnings Beat Estimates, Revenues Surge Y/Y, Guidance Up

InterDigital, Inc. IDCC reported strong second-quarter 2025 results, with both the top and bottom lines beating the Zacks Consensus Estimate. However, the company generated higher revenues year over year, owing to healthy licensing momentum in the smartphone business. IDCC is also advancing its leadership position in AI (artificial intelligence) applications for wireless and video technology.

IDCC’s Net Income

GAAP net income improved to $180.6 million or $5.35 per share from $109.7 million or $3.93 per share a year ago. Healthy top-line expansion drove net income.

Non-GAAP net income increased to $195.3 million or $6.52 per share from $118.9 million or $4.57 per share in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate of $3.36.

IDCC’s Revenues

Net sales in the quarter declined to $300.6 million from $223.5 million in the year-ago quarter. The year-over-year growth was induced by a multi-year license agreement with Samsung and a new license agreement with HP. The top line beat the consensus estimate of $193 million.

In the second quarter, Smartphone revenues increased 18% year over year to $235.1 million. A license agreement signed by major smartphone maker Samsung boosted the top line during the quarter. 80% of the global smartphone market, 7 out of the 10 largest smartphone vendors are now IDCC’s licensee. Revenues from CE, IoT/Auto group rose to $65.3 million from $23.7 million in the prior year quarter.

Annualized recurring revenue increased to $553.1 million, up 44% year over year, while catch-up revenues rose to $162.3 million from $127.6 million a year ago.

IDCC’s Other Details

Adjusted EBITDA rose to $237 million, up 50% year over year. Total operating expenses increased to $95.2 million from $89.6 million in the year-ago quarter. Operating income increased to $205.4 million from $133.9 million in the year-earlier quarter.

IDCC’s Cash Flow & Liquidity

In the second quarter, InterDigital used $105.1 million cash in operations against a cash utilization of $48.9 million in the year-earlier quarter.

As of June 30, 2025, it had $937 million in cash, cash equivalents and short-term investments, with $75.4 million of long-term debt and other liabilities compared.

IDCC’s Guidance Up

IDCC upgraded its outlook for 2025, backed by solid momentum across several verticals. For 2025, the company currently expects revenues in the range of $790-850 million, up from the prior estimation of $660-$760 million. Adjusted EBITDA is currently forecasted at $551-569 million, up from $400-$495 million previously estimated. IDCC expects non-GAAP earnings in the band of $14.17-14.77 up from $9.69-$12.92. The company is steadily advancing 6G development and placing strong emphasis on AI integration. This bodes well for long-term growth.

For the third quarter of 2025, InterDigital estimates revenues to be between $136 million and $140 million. Adjusted EBITDA is estimated in the band of $69-$75 million. Non-GAAP earnings are expected to be within $1.52-$1.72 per share.

IDCC’s Zacks Rank & Other Stocks to Consider

InterDigital currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Upcoming Releases

Arista Networks Inc. ANET is scheduled to release second-quarter 2025 earnings on Aug. 5. The Zacks Consensus Estimate for earnings is pegged at 65 cents per share, suggesting a growth of 25% from the year-ago reported figure. Arista has a long-term earnings growth expectation of 14.81%. It delivered an average earnings surprise of 11.82% in the last four reported quarters. Arista continues to benefit from the expanding cloud networking market, which is driven by the strong demand for scalable infrastructure.

Pinterest, Inc. PINS is set to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, implying a growth of 17.24% from the year-ago reported figure. Pinterest has a long-term earnings growth expectation of 33%.

Pinterest is witnessing greater engagement on the platform from its existing user base. The company’s focus on improving operational rigor and incorporating sophisticated AI models to enhance relevancy and personalization is likely to bring long-term benefits.

HubSpot, Inc. HUBS is scheduled to release second-quarter 2025 earnings on Aug. 8. The Zacks Consensus Estimate for earnings is pegged at $2.12 per share. HubSpot delivered an earnings surprise of 10.65% in the trailing four quarters. It has a strong balance sheet and generates significant cash flow, which makes HubSpot an attractive stock for investors.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research