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IDCC beat Q2 2026 revenue and earnings estimates despite year-over-year declines in sales and profit.
IDCC's Amazon licensing agreement lifted Streaming and Cloud Services revenues to $110 million.
InterDigital expects 2026 revenues of $775-$845 million and non-GAAP EPS of $10.85-$12.81.
InterDigital, Inc. (IDCC - Free Report) reported relatively healthy second-quarter 2026 results, with both top and bottom lines beating the Zacks Consensus Estimate.
The company’s strong execution across the licensing business, including the Amazon agreement and higher recurring revenues, drove the quarterly performance. However, lower smartphone and CE, IoT/Auto licensing revenues, along with higher operating costs, weighed on overall sales and earnings.
Net Income
On a GAAP basis, net income in the reported quarter declined to $116.4 million or $3.40 per share from $180.6 million or $5.35 per share in the prior-year quarter, primarily due to lower net sales and higher operating expenses, including increased intellectual property enforcement costs and share-based compensation.
Non-GAAP net income was $141.4 million or $4.62 per share compared with $195.3 million or $6.52 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $1.60 per share.
InterDigital, Inc. Price, Consensus and EPS Surprise
Quarterly revenues decreased to $260.2 million from the year-ago quarter’s tally of $300.6 million. However, the top line beat the Zacks Consensus Estimate of $144 million.
In the second quarter, smartphone revenues declined to $122.7 million from $235.1 million a year ago, owing to the timing of licensing revenue recognition. CE, IoT/Auto group revenues declined 58% year over year to $27.5 million due to lower licensing agreements. Streaming and Cloud Services generated $110 million in revenues during the quarter, driven by the new Amazon licensing agreement covering streaming services and devices.
Annualized recurring revenues increased 13% year over year to $625.7 million, while catch-up revenues declined to $103.7 million from $162.3 million a year ago.
Other Details
Adjusted EBITDA declined to $184.1 million from the prior-year figure of $236.7 million. Total operating expenses increased to $120.9 million from $95.2 million in the year-ago quarter, reflecting higher IP enforcement costs and share-based compensation. Operating income decreased to $139.2 million from $205.4 million in the year-earlier quarter due to high operating expenses.
Cash Flow & Liquidity
In the second quarter, InterDigital generated $82.5 million in cash from operations compared with $105.1 million in the year-earlier quarter. During the first six months of 2026, the company generated $98.6 million in cash compared with $85.1 million in the year-ago period. As of June 30, 2026, it had $1.11 billion in cash, cash equivalents and short-term investments, with $72.4 million of long-term debt and other liabilities.
Outlook
For the third quarter of 2026, InterDigital estimates revenues between $154 million and $158 million. Adjusted EBITDA is estimated in the band of $86-$92 million. Non-GAAP earnings are expected to be in the range of $1.94-$2.13 per share.
For 2026, the company currently expects revenues in the range of $775-$845 million, up from the earlier projection of $675-$775 million. Adjusted EBITDA is currently projected to be in the range of $469-$529 million, up from the earlier guidance of $381-$477 million. IDCC expects non-GAAP earnings in 2026 in the band of $10.85-$12.81 per share compared with $8.74-$11.84 in the previous quarter.
Arista Networks Inc. (ANET - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 4. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Motorola Solutions, Inc. (MSI - Free Report) is set to release second-quarter 2026 earnings Aug. 5. The Zacks Consensus Estimate for earnings is pegged at $3.86 per share, implying growth of 8.12% from the year-ago reported figure.
Motorola has a long-term earnings growth expectation of 9.47%. The company delivered an average earnings surprise of 5.17% in the last four reported quarters.
HubSpot, Inc. (HUBS - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 5. The Zacks Consensus Estimate for earnings is pegged at $3.02 per share, suggesting growth of 37.9% from the year-ago reported figure.
HubSpot has a long-term earnings growth expectation of 20.84%. The company delivered an average earnings surprise of 4.97% in the last four reported quarters.
View the Zacks #1 Rank List
Image: Bigstock
InterDigital Q2 Earnings Beat Estimates Despite Lower Y/Y Revenues
Key Takeaways
InterDigital, Inc. (IDCC - Free Report) reported relatively healthy second-quarter 2026 results, with both top and bottom lines beating the Zacks Consensus Estimate.
The company’s strong execution across the licensing business, including the Amazon agreement and higher recurring revenues, drove the quarterly performance. However, lower smartphone and CE, IoT/Auto licensing revenues, along with higher operating costs, weighed on overall sales and earnings.
Net Income
On a GAAP basis, net income in the reported quarter declined to $116.4 million or $3.40 per share from $180.6 million or $5.35 per share in the prior-year quarter, primarily due to lower net sales and higher operating expenses, including increased intellectual property enforcement costs and share-based compensation.
Non-GAAP net income was $141.4 million or $4.62 per share compared with $195.3 million or $6.52 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $1.60 per share.
InterDigital, Inc. Price, Consensus and EPS Surprise
InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote
Revenues
Quarterly revenues decreased to $260.2 million from the year-ago quarter’s tally of $300.6 million. However, the top line beat the Zacks Consensus Estimate of $144 million.
In the second quarter, smartphone revenues declined to $122.7 million from $235.1 million a year ago, owing to the timing of licensing revenue recognition. CE, IoT/Auto group revenues declined 58% year over year to $27.5 million due to lower licensing agreements. Streaming and Cloud Services generated $110 million in revenues during the quarter, driven by the new Amazon licensing agreement covering streaming services and devices.
Annualized recurring revenues increased 13% year over year to $625.7 million, while catch-up revenues declined to $103.7 million from $162.3 million a year ago.
Other Details
Adjusted EBITDA declined to $184.1 million from the prior-year figure of $236.7 million. Total operating expenses increased to $120.9 million from $95.2 million in the year-ago quarter, reflecting higher IP enforcement costs and share-based compensation. Operating income decreased to $139.2 million from $205.4 million in the year-earlier quarter due to high operating expenses.
Cash Flow & Liquidity
In the second quarter, InterDigital generated $82.5 million in cash from operations compared with $105.1 million in the year-earlier quarter. During the first six months of 2026, the company generated $98.6 million in cash compared with $85.1 million in the year-ago period. As of June 30, 2026, it had $1.11 billion in cash, cash equivalents and short-term investments, with $72.4 million of long-term debt and other liabilities.
Outlook
For the third quarter of 2026, InterDigital estimates revenues between $154 million and $158 million. Adjusted EBITDA is estimated in the band of $86-$92 million. Non-GAAP earnings are expected to be in the range of $1.94-$2.13 per share.
For 2026, the company currently expects revenues in the range of $775-$845 million, up from the earlier projection of $675-$775 million. Adjusted EBITDA is currently projected to be in the range of $469-$529 million, up from the earlier guidance of $381-$477 million. IDCC expects non-GAAP earnings in 2026 in the band of $10.85-$12.81 per share compared with $8.74-$11.84 in the previous quarter.
Zacks Rank
InterDigital stock 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 - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 4. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Motorola Solutions, Inc. (MSI - Free Report) is set to release second-quarter 2026 earnings Aug. 5. The Zacks Consensus Estimate for earnings is pegged at $3.86 per share, implying growth of 8.12% from the year-ago reported figure.
Motorola has a long-term earnings growth expectation of 9.47%. The company delivered an average earnings surprise of 5.17% in the last four reported quarters.
HubSpot, Inc. (HUBS - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 5. The Zacks Consensus Estimate for earnings is pegged at $3.02 per share, suggesting growth of 37.9% from the year-ago reported figure.
HubSpot has a long-term earnings growth expectation of 20.84%. The company delivered an average earnings surprise of 4.97% in the last four reported quarters.