InterDigital Beats Q4 Earnings Estimates Despite Lower Y/Y Revenues

InterDigital, Inc. IDCC reported relatively healthy fourth-quarter 2025 results, with both top and bottom lines beating the Zacks Consensus Estimate.

The company is experiencing a steady growth in licensing programs, smartphone business, and AI capabilities. However, both sales and earnings were affected by a sharp decline in catch-up revenues, mainly related to the 2024 OPPO license agreement and the Lenovo arbitration.

Net Income

On a GAAP basis, net income in the reported quarter declined to $43 million or $1.20 per share from $133.1 million or $4.09 per share in the prior-year quarter, primarily due to lower net sales.

Non-GAAP net income was $65.9 million or $2.12 per share compared with $150.6 million or $5.15 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $1.65.

For 2025, InterDigital reported GAAP net income of $406.6 million or $11.80 per share, compared with $358.6 million or $12.07 per share in 2024. Non-GAAP net income for 2025 was $465.1 million or $15.31 per share compared with $408.9 million or $14.97 per share in 2024.
 

InterDigital, Inc. Price, Consensus and EPS Surprise

InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote

Revenues

Quarterly revenues decreased to $158.2 million from the year-ago quarter’s tally of $252.8 million. However, the top line beat the Zacks Consensus Estimate of $147.1 million. For 2025, revenues decreased to $834 million from $868.5 million in 2024.

In the fourth quarter, smartphone revenues declined to $123.4 million from $230.6 million in the year-ago quarter. Revenues from CE, IoT/Auto group increased to $34.8 million from $21.8 million in the prior-year quarter.

Annualized recurring revenues increased 24.4% year over year to $582.4 million, while catch-up revenues declined to $12.6 million from $135.8 million a year ago.

Other Details

Adjusted EBITDA declined to $88.2 million from the prior-year figure of $198.1 million. Total operating expenses increased to $110.4 million from $90.3 million in the year-ago quarter. Operating income decreased to $47.8 million from $162.5 million in the year-earlier quarter.

Cash Flow & Liquidity

In the fourth quarter, InterDigital generated $63.4 million in cash from operations compared with $192 million in the year-earlier quarter. For 2025, the company generated $544.5 million of cash from operating activities compared with $271.5 million in 2024.

As of Dec. 31, 2025, it had $1.24 billion in cash, cash equivalents, and short-term investments, with $74.8 million of long-term debt and other liabilities compared with respective tallies of $958.2 million and $70.4 million a year ago.

Outlook

For the first quarter of 2026, InterDigital estimates revenues to be between $194 million and $200 million. Adjusted EBITDA is estimated in the band of $101-$110 million. Non-GAAP earnings are expected to be in the range of $2.39-$2.68 per share.

For 2026, the company expects revenues in the range of $675-$775 million. Adjusted EBITDA is currently forecasted at $381-$477 million. IDCC expects non-GAAP earnings in 2026 in the band of $8.74-$11.84. 

Zacks Rank

InterDigital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.    

Upcoming Releases

Arista Networks Inc. ANET is scheduled to release fourth-quarter 2025 earnings on Feb. 12. The Zacks Consensus Estimate for earnings is pegged at 75 cents per share, suggesting growth of 15.38% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 20.08%. The company delivered an average earnings surprise of 10.17% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release fourth-quarter 2025 earnings on Feb. 19. The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, indicating 5.42% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 5.96%. The company delivered an average earnings surprise of 10.46% in the last four reported quarters.

Lyft, Inc. LYFT is scheduled to release fourth-quarter 2025 earnings on Feb. 10. The Zacks Consensus Estimate for earnings is pegged at 32 cents per share, suggesting growth of 6.67% from the year-ago reported figure.

Lyft has a long-term earnings growth expectation of 24.41%. The company delivered an average earnings surprise of 1.17% in the last four reported quarters.

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

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