William Blair notes that InterDigital (IDCC) announced that it had signed a new multiyear license agreement with a major Chinese smartphone vendor. As a result, the company raised its third-quarter outlook, calling for revenue of $155M-$159M, a 14% increase from prior guidance. The new licensing agreement increases the company’s ARR by $26M, to about $580M. The firm now models an incremental $6.5M in recurring revenue per quarter from this deal and believes it will contribute roughly $11M in catch-up revenue in the third quarter. William Blair believes the stock is attractive given the upside potential from new and expanding partnerships in the smartphone market, the medium-term opportunity in consumer electronics, and the emerging opportunity to license to streaming video platforms. The firm maintains an Outperform rating on the name.
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