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InterDigital's (IDCC) Q1 Earnings Top on Solid Revenue Growth
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InterDigital, Inc. (IDCC - Free Report) reported strong first-quarter 2023 results, with both the bottom line and top line beating the respective Zacks Consensus Estimate. InterDigital recorded nearly a two-fold increase in revenues driven by solid contributions from Lenovo and Samsung licensing deals. The company expects this growth momentum to continue in the forthcoming quarters.
Net Income
Net income in the March quarter significantly improved to $105.3 million or $3.58 per share from $18 million or 58 cents per share in the prior-year quarter, primarily due to top-line growth. Non-GAAP net income rose to $123.6 million or $4.21 per share from $30.8 million or 99 cents per share a year ago. The bottom line surpassed the Zacks Consensus Estimate of 62 cents.
InterDigital, Inc. Price, Consensus and EPS Surprise
Total revenues in the quarter surged to $202.4 million from $101.3 million in the prior-year quarter, reflecting continuous licensing momentum. The top line benefited from catch-up revenues of $100.8 million from Lenovo, owing to a favorable court verdict for alleged patent infringements relating to the licensing of 3G, 4G and 5G patents. The top line beat the consensus estimate of $97 million.
Recurring revenues in the first quarter were $101.6 million, up from $99.1 million a year ago. The year-over-year increase was primarily driven by new patent license agreements inked during the quarter. InterDigital exhibited continuing licensing momentum and strength in its recurring revenue base.
Total operating expenses increased to $83.1 million from $71.1 million in the prior-year quarter, resulting in an operating income of $119.3 million and $30.2 million, respectively. Adjusted EBITDA was up 179% year over year to $154.8 million for a margin of 76%.
Cash Flow & Liquidity
In the first quarter of 2023, InterDigital utilized $27.9 million of cash for operating activities compared with cash utilization of $18 million in the prior-year period. As of Mar 31, 2023, the company had $950.7 million in cash and cash equivalents with $663.8 million of long-term debt and other long-term liabilities.
Q2 View
For the second quarter of 2023, InterDigital expects revenues to be between $100 million and $104 million. Total operating expenses are expected to lie within $78-$81 million. Net income is likely to be in the range of $16.1-$19.4 million or 60-70 cents per share. Non-GAAP earnings are expected to be within $1.19-$1.29 per share.
Headquartered in Raleigh, NC, Bandwidth Inc. (BAND - Free Report) operates as a Communications Platform-as-a-Service (CPaaS) provider, offering avant-garde software application programming interfaces for voice and messaging services. It is the only application programming interface (API) platform provider that owns a Tier 1 network with enhanced network capacity, primarily catering to business enterprises.
Bandwidth, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth expectation of 25% and delivered an earnings surprise of 342%, on average, in the trailing four quarters. It enables enterprises to rapidly scale communications functionalities to a vast range of applications and devices with its easy-to-use software APIs. As a leading provider of a cloud-based communications platform, Bandwidth benefits from cost-effective operations.
Comtech Telecommunications Corp. (CMTL - Free Report) , carrying a Zacks Rank #2, is a solid pick. Headquartered in Melville, NY, the company is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers.
Comtech’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable its customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data throughput. It holds leadership positions in the market for high-throughput modems used in cellular backhaul.
IHS Holding Limited (IHS - Free Report) , carrying a Zacks Rank #2, is another key pick. Based in London, the United Kingdom, it is one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count.
IHS Holding has more than 39,000 towers across its 11 markets: Brazil, Cameroon, Colombia, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia. The stock has gained 60.7% in the past six months.
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InterDigital's (IDCC) Q1 Earnings Top on Solid Revenue Growth
InterDigital, Inc. (IDCC - Free Report) reported strong first-quarter 2023 results, with both the bottom line and top line beating the respective Zacks Consensus Estimate. InterDigital recorded nearly a two-fold increase in revenues driven by solid contributions from Lenovo and Samsung licensing deals. The company expects this growth momentum to continue in the forthcoming quarters.
Net Income
Net income in the March quarter significantly improved to $105.3 million or $3.58 per share from $18 million or 58 cents per share in the prior-year quarter, primarily due to top-line growth. Non-GAAP net income rose to $123.6 million or $4.21 per share from $30.8 million or 99 cents per share a year ago. The bottom line surpassed the Zacks Consensus Estimate of 62 cents.
InterDigital, Inc. Price, Consensus and EPS Surprise
InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote
Quarter Details
Total revenues in the quarter surged to $202.4 million from $101.3 million in the prior-year quarter, reflecting continuous licensing momentum. The top line benefited from catch-up revenues of $100.8 million from Lenovo, owing to a favorable court verdict for alleged patent infringements relating to the licensing of 3G, 4G and 5G patents. The top line beat the consensus estimate of $97 million.
Recurring revenues in the first quarter were $101.6 million, up from $99.1 million a year ago. The year-over-year increase was primarily driven by new patent license agreements inked during the quarter. InterDigital exhibited continuing licensing momentum and strength in its recurring revenue base.
Total operating expenses increased to $83.1 million from $71.1 million in the prior-year quarter, resulting in an operating income of $119.3 million and $30.2 million, respectively. Adjusted EBITDA was up 179% year over year to $154.8 million for a margin of 76%.
Cash Flow & Liquidity
In the first quarter of 2023, InterDigital utilized $27.9 million of cash for operating activities compared with cash utilization of $18 million in the prior-year period. As of Mar 31, 2023, the company had $950.7 million in cash and cash equivalents with $663.8 million of long-term debt and other long-term liabilities.
Q2 View
For the second quarter of 2023, InterDigital expects revenues to be between $100 million and $104 million. Total operating expenses are expected to lie within $78-$81 million. Net income is likely to be in the range of $16.1-$19.4 million or 60-70 cents per share. Non-GAAP earnings are expected to be within $1.19-$1.29 per share.
Zacks Rank & Stocks to Consider
InterDigital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Raleigh, NC, Bandwidth Inc. (BAND - Free Report) operates as a Communications Platform-as-a-Service (CPaaS) provider, offering avant-garde software application programming interfaces for voice and messaging services. It is the only application programming interface (API) platform provider that owns a Tier 1 network with enhanced network capacity, primarily catering to business enterprises.
Bandwidth, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth expectation of 25% and delivered an earnings surprise of 342%, on average, in the trailing four quarters. It enables enterprises to rapidly scale communications functionalities to a vast range of applications and devices with its easy-to-use software APIs. As a leading provider of a cloud-based communications platform, Bandwidth benefits from cost-effective operations.
Comtech Telecommunications Corp. (CMTL - Free Report) , carrying a Zacks Rank #2, is a solid pick. Headquartered in Melville, NY, the company is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers.
Comtech’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable its customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data throughput. It holds leadership positions in the market for high-throughput modems used in cellular backhaul.
IHS Holding Limited (IHS - Free Report) , carrying a Zacks Rank #2, is another key pick. Based in London, the United Kingdom, it is one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count.
IHS Holding has more than 39,000 towers across its 11 markets: Brazil, Cameroon, Colombia, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia. The stock has gained 60.7% in the past six months.