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InterDigital, Inc. (IDCC - Free Report) reported relatively modest fourth-quarter 2023 results, with both the bottom line and top line surpassing the respective Zacks Consensus Estimate. The company generated lower revenues year over year, owing to declining catch-up revenues. However, healthy improvement in profit margins and record return of capital to shareholders were positive factors.
Net Income
Quarterly net income improved to $39.1 million or $1.41 per share, up from $32.4 million or $1.08 per share in the year-earlier quarter. Despite top-line decline, income tax benefits led to higher net income.
Non-GAAP net income was $37.5 million or $1.41 per share, down from $48.6 million or $1.62 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $1.21.
In 2023, GAAP net income rose to $214.1 million or $7.62 per share from $93.7 million or $3.07 per share in 2022. Non-GAAP net income was $254.4 million or $9.23 per share, up from $154.8 million or $5.08 per share in the prior year.
InterDigital, Inc. Price, Consensus and EPS Surprise
Net sales in the quarter declined to $105.5 million from $117.1 million in the year-ago quarter. The 10% year-over-year reduction was induced by lower catch-up revenues during the quarter. The top line beat the consensus estimate of $104 million.
In 2023, the company reported total revenues of $549.6 million, up from $457.8 million in 2022.
In the fourth quarter, total recurring revenues were $103.3 million, marginally down from $103.6 million in the year-ago quarter. Net sales surpassed our estimate of $77.7 million. Smartphone revenues decreased 1% year over year to $88.1 million. Net sales from CE, loT/Auto declined to $17.1 million from $28.2 million in the year-ago quarter.
Total catch-up revenues decreased to $2.2 million from $13.5 million. Net sales fell short of our estimate of $26.9 million.
Other Details
Adjusted EBITDA decreased 18% year over year to $53.3 million. Total operating expenses rose 2% year over year to $80.2 million due to higher general and administrative costs. Operating income fell to $25.3 million from $38.6 million in year earlier quarter.
Cash Flow & Liquidity
In the fourth quarter, InterDigital utilized $23.5 million of cash from operating activities against $356.5 million cash generated from operations in the year-earlier period. In 2023, the company generated $213.7 million of cash from operating activities compared to $286 million cash generated in 2022. As of Dec 31, 2023, it had $1 billion in cash and cash equivalents with $84.3 million of long-term debt and other long-term liabilities compared to respective tallies of $1.2 billion or $660.7 million in 2022.
Outlook
For the first quarter of 2024, InterDigital estimates revenues to be between $245 million and $255 million. Adjusted EBITDA is expected in the band of $116-$131 million. Non-GAAP earnings are expected to be within $2.40-$2.95 per share.
For 2024, management anticipates revenues in the range of $620-$670 million. Adjusted EBITDA is forecasted at about $310-$345 million. Non-GAAP earnings per share are expected between $7.45 and $8.76 per share.
Management expects positive momentum to drive the top line in 2024. The newly inked license agreement with Samsung will likely boost revenues in the upcoming quarter.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has delivered an earnings surprise of 13.28%, on average, in the trailing four quarters.
The company holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. It is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.
Qualcomm Inc. (QCOM - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 5.9%. In the last reported quarter, it delivered an earnings surprise of 15.55%.
It designs, manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access technology. The products include CDMA-based integrated circuits and system software for wireless voice and data communications as well as global positioning system products.
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InterDigital (IDCC) Q4 Earnings Beat Despite Lower Revenues
InterDigital, Inc. (IDCC - Free Report) reported relatively modest fourth-quarter 2023 results, with both the bottom line and top line surpassing the respective Zacks Consensus Estimate. The company generated lower revenues year over year, owing to declining catch-up revenues. However, healthy improvement in profit margins and record return of capital to shareholders were positive factors.
Net Income
Quarterly net income improved to $39.1 million or $1.41 per share, up from $32.4 million or $1.08 per share in the year-earlier quarter. Despite top-line decline, income tax benefits led to higher net income.
Non-GAAP net income was $37.5 million or $1.41 per share, down from $48.6 million or $1.62 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $1.21.
In 2023, GAAP net income rose to $214.1 million or $7.62 per share from $93.7 million or $3.07 per share in 2022. Non-GAAP net income was $254.4 million or $9.23 per share, up from $154.8 million or $5.08 per share in the prior year.
InterDigital, Inc. Price, Consensus and EPS Surprise
InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote
Revenues
Net sales in the quarter declined to $105.5 million from $117.1 million in the year-ago quarter. The 10% year-over-year reduction was induced by lower catch-up revenues during the quarter. The top line beat the consensus estimate of $104 million.
In 2023, the company reported total revenues of $549.6 million, up from $457.8 million in 2022.
In the fourth quarter, total recurring revenues were $103.3 million, marginally down from $103.6 million in the year-ago quarter. Net sales surpassed our estimate of $77.7 million. Smartphone revenues decreased 1% year over year to $88.1 million. Net sales from CE, loT/Auto declined to $17.1 million from $28.2 million in the year-ago quarter.
Total catch-up revenues decreased to $2.2 million from $13.5 million. Net sales fell short of our estimate of $26.9 million.
Other Details
Adjusted EBITDA decreased 18% year over year to $53.3 million. Total operating expenses rose 2% year over year to $80.2 million due to higher general and administrative costs. Operating income fell to $25.3 million from $38.6 million in year earlier quarter.
Cash Flow & Liquidity
In the fourth quarter, InterDigital utilized $23.5 million of cash from operating activities against $356.5 million cash generated from operations in the year-earlier period. In 2023, the company generated $213.7 million of cash from operating activities compared to $286 million cash generated in 2022. As of Dec 31, 2023, it had $1 billion in cash and cash equivalents with $84.3 million of long-term debt and other long-term liabilities compared to respective tallies of $1.2 billion or $660.7 million in 2022.
Outlook
For the first quarter of 2024, InterDigital estimates revenues to be between $245 million and $255 million. Adjusted EBITDA is expected in the band of $116-$131 million. Non-GAAP earnings are expected to be within $2.40-$2.95 per share.
For 2024, management anticipates revenues in the range of $620-$670 million. Adjusted EBITDA is forecasted at about $310-$345 million. Non-GAAP earnings per share are expected between $7.45 and $8.76 per share.
Management expects positive momentum to drive the top line in 2024. The newly inked license agreement with Samsung will likely boost revenues in the upcoming quarter.
Zacks Rank & Other Stocks to Consider
InterDigital currently has a Zacks Rank #2 (Buy).
NVIDIA Corporation (NVDA - Free Report) , currently carrying a Zacks Rank #2, delivered a trailing four-quarter average earnings surprise of 18.99%. In the last reported quarter, it delivered an earnings surprise of 19.64%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has delivered an earnings surprise of 13.28%, on average, in the trailing four quarters.
The company holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. It is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.
Qualcomm Inc. (QCOM - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 5.9%. In the last reported quarter, it delivered an earnings surprise of 15.55%.
It designs, manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access technology. The products include CDMA-based integrated circuits and system software for wireless voice and data communications as well as global positioning system products.