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InterDigital Q1 results beat estimates despite lower revenues and profit year over year.
IDCC saw smartphone revenues drop sharply, while the IoT and CE segment jumped 212% on new deals.
Higher costs, lower catch-up revenues and weak smartphone demand weighed on earnings.
InterDigital, Inc. (IDCC - Free Report) reported relatively healthy first-quarter 2026 results, with both top and bottom lines beating the Zacks Consensus Estimate.
The company’s licensing business remained stable, supported by new customer wins and higher recurring revenues. However, lower catch-up revenues compared to last year, weakness in the smartphone licensing business, and higher costs weighed on overall sales and earnings.
Net Income
On a GAAP basis, net income in the reported quarter declined to $75.3 million or $2.14 per share from $115.6 million or $3.45 per share in the prior-year quarter, primarily due to lower net sales and higher operating expenses, including increased revenue-sharing costs from the LG TV deal and heavy spending on IP enforcement.
Non-GAAP net income was $79.4 million or $2.57 per share compared with $125.7 million or $4.21 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents.
InterDigital, Inc. Price, Consensus and EPS Surprise
Quarterly revenues decreased to $205.4 million from the year-ago quarter’s tally of $210.5 million. However, the top line beat the Zacks Consensus Estimate of $197.7 million.
In the first quarter, smartphone revenues declined to $123.4 million from $184 million in the year-ago quarter. CE, IoT/Auto group generated $81.9 million in revenues, up 212% year over year, mainly driven by new licensing agreements and higher contributions from connected devices and automotive markets.
Annualized recurring revenues increased 13% year over year to $567.2 million, while catch-up revenues declined to $63.6 million from $84.8 million a year ago.
Other Details
Adjusted EBITDA declined to $111.8 million from the prior-year figure of $159.1 million. Total operating expenses increased to $123.2 million from $78.7 million in the year-ago quarter. Operating income decreased to $82.3 million from $131.8 million in the year-earlier quarter.
Cash Flow & Liquidity
In the first quarter, InterDigital generated $16.1 million in cash from operations compared with $20 million used in the year-earlier quarter. As of March. 31, 2026, it had $1.08 billion in cash, cash equivalents and short-term investments, with $69.4 million of long-term debt and other liabilities.
Outlook
For the second quarter of 2026, InterDigital estimates revenues between $139 million and $143 million. Adjusted EBITDA is estimated in the band of $67-$73 million. Non-GAAP earnings are expected to be in the range of $1.41-$1.60 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 #4 (Sell).
Arista Networks Inc. (ANET - Free Report) is scheduled to release first-quarter 2026 earnings on May 5. The Zacks Consensus Estimate for earnings is pegged at 81 cents per share, suggesting growth of 24.62% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 17.94%. The company delivered an average earnings surprise of 9% in the last four reported quarters.
CDW Corporation (CDW - Free Report) is set to release first-quarter 2026 earnings on May 6. The Zacks Consensus Estimate for earnings is pegged at $2.28 per share, implying growth of 6.05% from the year-ago reported figure.
CDW has a long-term earnings growth expectation of 7.25%. The company delivered an average earnings surprise of 5.72% in the last four reported quarters.
Motorola Solutions, Inc. (MSI - Free Report) is set to release first-quarter 2026 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at $3.25 per share, implying growth of 2.2% from the year-ago reported figure.
Motorola has a long-term earnings growth expectation of 9.4%. The company delivered an average earnings surprise of 5.66% in the last four reported quarters.
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InterDigital Q1 Earnings Surpass Estimates Despite Lower Y/Y Revenues
Key Takeaways
InterDigital, Inc. (IDCC - Free Report) reported relatively healthy first-quarter 2026 results, with both top and bottom lines beating the Zacks Consensus Estimate.
The company’s licensing business remained stable, supported by new customer wins and higher recurring revenues. However, lower catch-up revenues compared to last year, weakness in the smartphone licensing business, and higher costs weighed on overall sales and earnings.
Net Income
On a GAAP basis, net income in the reported quarter declined to $75.3 million or $2.14 per share from $115.6 million or $3.45 per share in the prior-year quarter, primarily due to lower net sales and higher operating expenses, including increased revenue-sharing costs from the LG TV deal and heavy spending on IP enforcement.
Non-GAAP net income was $79.4 million or $2.57 per share compared with $125.7 million or $4.21 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents.
InterDigital, Inc. Price, Consensus and EPS Surprise
InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote
Revenues
Quarterly revenues decreased to $205.4 million from the year-ago quarter’s tally of $210.5 million. However, the top line beat the Zacks Consensus Estimate of $197.7 million.
In the first quarter, smartphone revenues declined to $123.4 million from $184 million in the year-ago quarter. CE, IoT/Auto group generated $81.9 million in revenues, up 212% year over year, mainly driven by new licensing agreements and higher contributions from connected devices and automotive markets.
Annualized recurring revenues increased 13% year over year to $567.2 million, while catch-up revenues declined to $63.6 million from $84.8 million a year ago.
Other Details
Adjusted EBITDA declined to $111.8 million from the prior-year figure of $159.1 million. Total operating expenses increased to $123.2 million from $78.7 million in the year-ago quarter. Operating income decreased to $82.3 million from $131.8 million in the year-earlier quarter.
Cash Flow & Liquidity
In the first quarter, InterDigital generated $16.1 million in cash from operations compared with $20 million used in the year-earlier quarter. As of March. 31, 2026, it had $1.08 billion in cash, cash equivalents and short-term investments, with $69.4 million of long-term debt and other liabilities.
Outlook
For the second quarter of 2026, InterDigital estimates revenues between $139 million and $143 million. Adjusted EBITDA is estimated in the band of $67-$73 million. Non-GAAP earnings are expected to be in the range of $1.41-$1.60 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 #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks Inc. (ANET - Free Report) is scheduled to release first-quarter 2026 earnings on May 5. The Zacks Consensus Estimate for earnings is pegged at 81 cents per share, suggesting growth of 24.62% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 17.94%. The company delivered an average earnings surprise of 9% in the last four reported quarters.
CDW Corporation (CDW - Free Report) is set to release first-quarter 2026 earnings on May 6. The Zacks Consensus Estimate for earnings is pegged at $2.28 per share, implying growth of 6.05% from the year-ago reported figure.
CDW has a long-term earnings growth expectation of 7.25%. The company delivered an average earnings surprise of 5.72% in the last four reported quarters.
Motorola Solutions, Inc. (MSI - Free Report) is set to release first-quarter 2026 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at $3.25 per share, implying growth of 2.2% from the year-ago reported figure.
Motorola has a long-term earnings growth expectation of 9.4%. The company delivered an average earnings surprise of 5.66% in the last four reported quarters.